transnational corporations' outward expression of inward

Indiana Journal of Global Legal Indiana Journal of Global Legal

Studies Studies

Volume 20 Issue 2 Article 10

Summer 2013

Transnational Corporations' Outward Expression of Inward Self-Transnational Corporations' Outward Expression of Inward Self-

Constitution: The Enforcement of Human Rights by Apple, Inc. Constitution: The Enforcement of Human Rights by Apple, Inc.

Larry Cata Backer Pennsylvania State University, [email protected]

Follow this and additional works at: https://www.repository.law.indiana.edu/ijgls

Part of the Constitutional Law Commons, Human Rights Law Commons, International Law Commons,

and the Transnational Law Commons

Recommended Citation Recommended Citation Backer, Larry Cata (2013) "Transnational Corporations' Outward Expression of Inward Self-Constitution: The Enforcement of Human Rights by Apple, Inc.," Indiana Journal of Global Legal Studies: Vol. 20 : Iss. 2 , Article 10. Available at: https://www.repository.law.indiana.edu/ijgls/vol20/iss2/10

This Symposium is brought to you for free and open access by the Law School Journals at Digital Repository @ Maurer Law. It has been accepted for inclusion in Indiana Journal of Global Legal Studies by an authorized editor of Digital Repository @ Maurer Law. For more information, please contact [email protected].

https://www.repository.law.indiana.edu/ijgls

https://www.repository.law.indiana.edu/ijgls

https://www.repository.law.indiana.edu/ijgls/vol20

https://www.repository.law.indiana.edu/ijgls/vol20/iss2

https://www.repository.law.indiana.edu/ijgls/vol20/iss2/10

https://www.repository.law.indiana.edu/ijgls?utm_source=www.repository.law.indiana.edu%2Fijgls%2Fvol20%2Fiss2%2F10&utm_medium=PDF&utm_campaign=PDFCoverPages

http://network.bepress.com/hgg/discipline/589?utm_source=www.repository.law.indiana.edu%2Fijgls%2Fvol20%2Fiss2%2F10&utm_medium=PDF&utm_campaign=PDFCoverPages




https://www.repository.law.indiana.edu/ijgls/vol20/iss2/10?utm_source=www.repository.law.indiana.edu%2Fijgls%2Fvol20%2Fiss2%2F10&utm_medium=PDF&utm_campaign=PDFCoverPages

mailto:[email protected]

http://www.law.indiana.edu/lawlibrary/index.shtml

http://www.law.indiana.edu/lawlibrary/index.shtml

Transnational Corporations' OutwardExpression of Inward Self-Constitution:

The Enforcement of Human Rightsby Apple, Inc.

LARRY CATA BACKER*

ABSTRACT

Societal constitutionalism presents us with alternatives tostate-centered constitutional theory. But this alternative does not somuch displace as extend conventional constitutional theory as a set ofstatic premises that structure the organization of legitimate governanceunits. Constitutional theory, in either its conventional or societal forms,engages in both a descriptive and a normative project-the formerlooking to the incarnation of an abstraction and the later to thedevelopment of a set of presumptions and principles through which thisincarnation can be judged. Constitutional theory is conventionallyapplied to states-that is, to those manifestations of organized powerconstituted by a group of individuals, bounded by a territory, andevidenced by the institution of government. But today a certain measureof disaggregation has managed to manifest a constituting power.Globalization has opened holes in the walls.that used to serve to policeand protect states and their power authority. Societal aggregations canexist now between borders. Groups of individuals (and not just naturalpersons) incarnate abstractions of governance and then judge them inways that are consonant with constitutional theory. These emergingrealities have produced societal constitutionalism. But like conventionalconstitutionalism, societal constitutionalism seeks the comfort ofequilibrium and stasis as the basic operating premises of

* W. Richard and Mary Eshelman Faculty Scholar & Professor of Law, Professor ofInternational Affairs, Pennsylvania State University. The author may be contacted [email protected]. The paper was first presented at the International conference, SocietalConstitutionalism and Globalization, hosted by the Hague Institute for theInternationalization of Law and the International University College, Torino, Italy, May 18,2012. My thanks to Gunther Teubner (Goethe Universitat Frankfurt am Main) and AnnaBeckers (Maastricht University) for organizing this excellent conference.

Indiana Journal of Global Legal Studies Vol. 20, Issue 2 (2013)@ Indiana University Maurer School of Law

805

INDIANA JOURNAL OF GLOBAL LEGAL STUDIES 20:2

self-constituting governance systems. This paper considers societalconstitutionalism in its dynamic element-as a system structuresconstant adjustment among the constituting elements of a governanceunit (whether state, corporation, religion, etc.)-in three dimensionalgovernance space. After an introduction, Section I engages in frameworksetting, focusing on the structures of societal constitutionalism within thelogic of globalization. Section II provides an illustration of a societallyconstituted enterprise operating in three dimensional dynamicgovernance space. Section III then develops the more importantcharacteristics of this new dynamic and permeable constitutionalframework. The paper concludes where it started-suggesting the need toexpand our understanding of constitutional theory to includecommunication among systems in a complex polycentric constitutinguniverse.

INTRODUCTION

Constitutional theory was once, and not so long ago,' the province ofthe state.2 Its construction was meant to solidify and protect theideology of a world order grounded on the state as the supreme (or inMarxist Leninist theory the sole)3 construction of abstractsocial-political-economic societies. The state stood not merely as the soleself-constituting community, but also, like the God of the OldTestament, 4 produced an eco-system within a world populated bydistinct and well-ordered subordinate enterprises that defined the

1. See WESTEL W. WILLOUGHBY, THE FUNDAMENTAL CONCEPTS OF PUBLIC LAW 30(1924).

2. See generally J.P. Nettl, The State as a Conceptual Variable, in 1 THE STATE:CRITICAL CONCEPTS 9 (John A. Hall ed., Routledge 1994) (1968) (discussing how thestate's role in constitutional design and the social sciences has declined over the past fiftyyears).

3. One must make a distinction between classical Marxist theory, which posited thewithering away of the state but in which the theory of the state remain ambiguous at best.See Clyde Barrow, The Marx Problem in Marxian State Theory, 64(1) SCIENCE ANDSOCIETY 87-118 (2000) (with Leninism and post Leninist theory); THE HISTORICALEXPERIENCE OF THE DICTATORSHIP OF THE PROLETARIAT (1959), available athttp://www.marx2mao.com/PDFs/HEDP56.pdf. Cf. VLADIMIR LENIN, THE STATE ANDREVOLUTION, COLLECTED WORKS, VOLUME 25 381-492, available at http://www.marxists.orglarchivellenin/works/1917/staterev/ (especially The 'Withering Away" of the State, andViolent Revolution).

4. See Genesis 1:1.

806

THE ENFORCEMENT OF HUmAN RIGHTS BY APPLE, INC.

international order,5 but also the private ecologies of the modernnongovernmental organization6 and the economic enterprise.7

But globalization, like the apple well digested by Adam and Eve, 8

has expelled both constitution and constituting elements from the stateof the Garden of Eden. 9 There has been scholarly movement away fromthe state and even public international organization paradigms,o toinclude private actors." The result has been the production of a mass ofself-constituting and constituted societies,12 which exist in vertically andhorizontally vectored arrangements of simultaneously governing,functionally differentiated" governance organs.14 It has also produced amovement to advance another singular political project-the

5. See Jost E. ALVAREZ, INTERNATIONAL ORGANIZATIONS AS LAW-MAKERS (2006)(providing a description of these enterprises).

6. See generally Bob Reinalda & Bertjan Verbeek, Theorizing Power RelationsBetween NGOs, Intergovernmental Organizations, and States, in NON-STATE ACTORS ININTERNATIONAL RELATIONS 145 (Bas Arts et al. eds., 2001) (assessing the influence ofnongovernmental organizations on international and transnational politics, as well as theimportance of nonstate actors).

7. See generally Larry CatA Backer, Introduction to HARMONIZING LAW IN AN ERA OFGLOBALIZATION: CONVERGENCE, DIVERGENCE, AND RESISTANCE (Larry CatA Backer ed.,2007).

8. See Genesis 3:6.9. See, e.g., Gunther Teubner, Societal Constitutionalism: Alternatives to State-Centred

Constitutional Theory?, in TRANSNATIONAL GOVERNANCE AND CONSTITUTIONALISM 3 (ChristianJoerges et al. eds., 2004) (discussing the effects of globalization on the governance ofinternational regulations like the Internet).

10. See, e.g., Layna Mosley, Private Governance for the Public Good?: Exploring PrivateSector Participation in Global Financial Regulation, in POWER, INTERDEPENDENCE, ANDNONSTATE ACTORS IN WORLD POLITICS 126 (Helen V. Milner & Andrew Moravesik eds.,2009) (discussing globalization effects on international markets and the roles played byprivate actors).

11. For an early and influential call to this effort, see generally ROBERT O. KEOHANE &JOSEPH S. NYE, POWER AND INTERDEPENDENCE (3d ed., Longman 2001) (1977). See alsoPETER R. BAEHR, NON-GOVERNMENTAL HUMAN RIGHTS ORGANIZATIONS IN INTERNATIONALRELATIONS (2009).

12. I avoid the term "communities" because of its close connection with the work ofanother century and another sensibility. See, e.g., FERDINAND TONNIES, COMMUNITY ANDCIVIL SOCIETY (Jose Harris ed., Margaret Hollis trans., Cambridge Univ. Press 2001)(1887).

13. See, e.g., Anders Esmark, The Functional Differentiation of Governance: PublicGovernance Beyond Hierarchy, Market and Networks, 87 PUB. ADMIN. 351 (2009)(exploring the relation between the historical constitution of modern society's governancetraditions and the transformation of public governance).

14. See generally DAVID SCHNEIDERMAN, CONSTITUTIONALIZING ECONOMIC GLOBALIZATION:

INVESTMENT RULES AND DEMOCRACY'S PROMISE 1-21 (2008).

807


development of a single global government. 15 But it has also suggestedthe basic condition of fragmentation and power decentering as the basiccondition within which governance is constituted.1 6 And it has alsoproduced movements that suggest that what appears to be a broadeningof constitutionalism outward from the state is instead the developmentof a kinetic element to governance grounded in networks,17 or ofinstitutions that now mediate between legal, political, and economicrealms.'8 That religion is not included merely suggests an additionaltopic for the future when its constituting power becomes harder toavoid.' 9 But most importantly, it has begun to interrogate the currentlimits of constitutional theory-moving analysis from a grounding instate to one in societal constitutionalism. 20 But does this alternativeextend rather than displace conventional constitutional theory as a setof static premises that structure the organization of legitimategovernance units?

Constitutional theory is grounded in two principal objectives-thefirst is to incarnate an abstraction, and the second is to develop a set ofpresumptions and principles through which this incarnation can be

15. See RICHARD FALK & ANDREW STRAUSS, A GLOBAL PARLIAMENT: ESSAYS ANDARTICLES 13-18 (2011); Alexander Wendt, Why a World State is Inevitable, 9 EUR. J. INT'LREL. 491, 491 (2003).

16. See Andreas Fischer-Lescano & Gunther Teubner, Regime Collisions: The VainSearch for Legal Unity in the Fragmentation of Global Law, 25 MICH. J. INT'L L. 999,1017-1044 (2004).

17. See ANNE-MARIE SLAUGHTER, A NEW WORLD ORDER (2004) (arguing that a newmanner of global governance has emerged through the use of ad hoc or treaty-basedsecurity and financial networks); Lars Viellechner, The Network of Networks: Karl-HeinzLadeur's Theory of Law and Globalization, 10 GERMAN L.J. 515, 517-18 (2009) (citingKarl-Heinz Ladeur, Globalization and the Conversion of Democracy to PolycentricNetworks: Can Democracy Survive the End of the Nation State?, in PUBLIC GOVERNANCEIN THE AGE OF GLOBALIZATION 89, 99, 113 (Karl-Heinz Ladeur ed., 2004)) ("[H]e ratherrecognizes an adequate pattern of social organization for a radically fragmented andglobalized society in a 'network of networks' of heterarchical social relationshipsgenerating collective order as a secondary transsubjective effect of individual cooperationand coordination under conditions of uncertainty.").

18. See Moritz Renner, Occupy the System! Societal Constitutionalism and TransnationalCorporate Accounting, 20 IND. J. GLOBAL LEGAL STUD. 941 (2013).

19. See Larry CatA Backer, Theocratic Constitutionalism: An Introduction to a NewLegal Global Ordering, 16 IND. J. GLOBAL LEGAL STUD. 85, 99, 106 (2009).

20. See Gunther Teubner, Fragmented Foundations: Societal Constitutionalism Beyondthe Nation State, in THE TWILIGHT OF CONSTITUTIONALISM 327, 328-29 (Petra Dobner &Martin Loughlin eds., 2010) ("[Hlow is constitutional theory to respond to the challengesarising from these two major trends of privatisation and globalisation? This is whattoday's 'constitutional question' ought to be. Today's constitutionalism moves beyond thenation state. It does so in a double sense: constitutionalism moves into the transnationalcontext and into the private sector.").

808

THE ENFORCEMENT OF HUMAN RIGHTS BY APPLE, INC.

judged. 21 With respect to the first objective, constitutional theory can beunderstood as engaging in a descriptive project. This project, of course,is one that also evidences choices among characteristics deemednecessary to reify the idea of the constituent elements, the constitutingacts, and the outlines of the object constituted.22 Michel Foucault, 23

perhaps, understood this best, without understanding its application toconstitutional theory, when he described the way in which mass societyhas itself been incarnated from out of the mass of statistics, measures,habits, affinities, and characteristics that serve as an aggregation ofcircumstantial evidence of the object identified, and thus identified,given "life" (reality).24 That is, abstractions like society and governmentare understood only by reference to the means by which their presenceand effects are measured. The choice of what to measure, then, alsobecomes a choice about how to construct society, its premises, andcharacteristics. Gunther Teubner 25 understood best the functionalcharacteristics of the formerly functionally constrained notion of law. 26

But the descriptive project of constitutional theory does not produce asingular incarnation (despite the often misleading assertions ofadvocates of one or another of the forms it has taken). As such,constitutional theory must also be grounded judgment, and thus thesecond objective.

With respect to this second objective, constitutional theory can beunderstood as engaging in a normative project-a project that speaks tofundamental values in the relationship of the entity to its members andto others,27 and to constrain politics. 28 This is a project that is meant to

21. See Larry CatA Backer, From Constitution to Constitutionalism: A GlobalFramework for Legitimate Public Power Systems, 113 PENN ST. L. REV. 671 (2009).

22. See Kaarlo Tuori, The Failure of the EU's Constitutional Project: A CulturalDiscrepancy, in CONSTITUTIONALISM: NEW CHALLENGES: EUROPEAN LAW FROM A NORDICPERSPECTIVE 103, 109 (2008) ("In the political system, the constitution fulfills both anorganizational and a legitimizing function. The organizational part . . . defines the basicinstitutional structure of political power . . . The constitution channels the legitimacy ofthe law into the political system.").

23. Michel Foucault (1926-1984) was a highly influential, though controversial,philosopher and social theorist well known for his work on the nature of governance andinstitutional power and control. For biographies, see DIDIER ERIBON, MICHEL FOUCAULT(Betsy Wing, trans., 1991); DAVID MACEY, THE LIVES OF MICHEL FOUCAULT (1994).

24. MICHEL FOUCAULT, SECURITY, TERRITORY, POPULATION: LECTURES AT THECOLLtGE DE FRANCE 1977-1978, at 110 (Michel Senellart ed., Graham Burchell trans.,Macmillan 2007) (2004).

25. Professor Gunther Teubner is a German legal scholar and sociologist, best knownfor his works within the field of Social Theory of Law.

26. See Gunther Teubner, "Global Bukowina" Legal Pluralism in the World Society, inGLOBAL LAW WITHOUT A STATE 3, 3-5 (Gunther Teubner ed., 1997).

27. See Larry CatA Backer, God(s) Over Constitutions: International and ReligiousTransnational Constitutionalism in the 21st Century, 27 MISS. C. L. REV. 11 (2008).

809


help distinguish among incarnations of institutional actors,29 as well asamong those societal aggregations from which such constructions mightarise. It thus is meant to tie constitution to the greater project of socialnormative construction. Constitutional theory speaks of thesedistinguishing values/premises in terms of democracy, human rightsand dignity, sustainability, and the like. But again, even theconstruction of social normative structures occurs in the plural. So,constitutional theory must also account for the normative values thatwould be central to its normative project-developing a basis for judgingthe choice and use of normative values in the incarnation of aconstituted social object. To this end, legitimacy becomes a centralcomponent of the normative project of constitutional theory, with theevaluation of the "guts" of the incarnated (constituted) being the greatfocus. Constitutional theory speaks of these distinguishingvalues/premises in terms of rule of law, process, accountability,participation, and the like. That discussion is as possible withinnonstate governance units as it is within states. That is part of theurtext of societal constitutionalism, at once primal, seminal, orprototypical.

Constitutional theory, traditionally, has been applied to creationsholding political power-that is, to those manifestations of organizedpower constituted by a group of individuals, bounded by a territory, andevidenced by the institution of government. 30 Territory and powerserved as the boundaries from within which these incarnations ofaggregated existence operated-whether in legitimate or illegitimateform. Power was understood to be plenary (and thus political) in thesense that it could extend to the management of the life, property, andliberty of individuals subject to its will.31 Such creations (nationalstates) were autonomous and supreme within their territory. Theseterritories would have to deal with other territories differently from the

28. PEDRO CRUZ VILLALON, LA FORMACION DEL SISTEMA EUROPEO DE CONTROL DECONSTITUCIONALIDAD (1918-1939) (1987) (analyzing European constitutional experiencesbetween the First and Second World Wars).

29. For example, constitutionalism's normative project has as an objective the creationof structures of taxonomies of governments by type and of ways to distinguish amongthem. See, e.g., Louis Henkin, A New Birth of Constitutionalism: Genetic Influences andGenetic Defects, in CONSTITUTIONALISM: IDENTITY, DIFFERENCE AND LEGITIMACYTHEORETICAL PERSPECTIVES 39 (Michel Rosenfeld, ed., 1994).

30. See Dieter Grimm, The Constitution in the Process of Denationalization, inCONSTITUTIONALISM: NEW CHALLENGES: EUROPEAN LAW FROM A NORDIC PERSPECTIVE, supranote 22, at 71, 81 ("From a historical perspective, the constitution presupposes the state as aform of political community.").

31. Cf. U.S. CONST. amend. XIV (the state's power to deprive individuals of their life,liberty, or property is limited only by concepts of due process).

810


way they interacted with persons or entities within their territory.These states developed methods of communication with each other that,in its day, were understood by the monikers international law andrelations. For some, those monikers remain the unique boundary postsof constitutional discourse, within which all else ought to besubsumed.32 The extension of traditional constitutional theory issometimes structured within notions of cosmopolitanism-though onesin which like systems are always matched with like systems. 33

In contrast, societal constitutionalism is grounded in the insightthat today a certain measure of disaggregation has managed to manifesta constituting power, manifestations that are understood to exist withina constitutional framework. 34 Globalization has opened holes in thewalls that used to police and protect states and their power authority.Societal aggregations can exist now between borders. Groups ofindividuals (and not just natural persons) incarnate abstractions ofgovernance and then judge them in ways that are consonant withconstitutional theory. The territorial demarcations of these "states" arefunctional, and their power is bounded by the logic of the purpose oftheir existence. Yet, even without territory or the full panoply ofpolitical power, they can manifest an autonomous self-awareness andfunctionality that recalls the constitutional structures of states.3 5

Though not states, they exist as constitutional entities all the same.These entities are developing methods of communicating with eachother and with states through a variety of mechanisms-only some ofwhich are grounded in the forms and content of traditional structures oflaw.36

The absence of territory also makes demarcation more nebulous.These societal constitutional organisms exist without the orderlyarrangement of states (and the entities they have spawned within theinternational sphere). More complicated still, these societallyconstituted organisms exist alongside, within, between, and amongstates. Polycetricity, thus, marks the new world order for constitutional

32. Id. at 80.33. See Viad F. Perju, Cosmopolitanism and Constitutional Self-Government, 8 INT'L J.

CONST. L. 326 (2010).34. See, e.g., DAVID SCIULLI, THEORY OF SOCIETAL CONSTITUTIONALIsM: FOUNDATIONS

OF A NON-MARXIST CRITICAL THEORY (1992).35. See, e.g., GUNTER TEUBNER, CONSTITUTIONAL FRAGMENTs: SOCIETAL CONSTTUTIONALSiM

AND GLOBALIZATION (2012). Cf. Richard Albert, The Cult of Constitutionalism, 39 FLA. ST. L. REV.373(2012).

36. See Larry CatA Backer, Governance Without Government: An Overview, in BEYONDTERRITORIALITY: TRANSNATIONAL LEGAL AUTHORITY IN AN AGE OF GLOBALIZATION 87(Giinther Handl et al. eds., 2012).

811


organisms. 37 This sometimes produces a tendency to developmeta-management approaches.38 In a world infused with incarnatedconstitutional beings existing polycentrically in a virtualthree-dimensional bowl filled with the stuff of constitutional possibility,the bowl itself will not be visible and the constitutional possibilitieswithin it will resist management of any effective kind.3 9

Like conventional constitutionalism, societal constitutionalismseeks the comfort of equilibrium and stasis as the basic operatingpremises of self-constituting governance systems. This paper considerssocietal constitutionalism in its dynamic element-as a systemstructures constant adjustment among the constituting elements of agovernance unit (whether state, corporation, religion, etc.). Building onGunther Teubner's insights of communicative hypercycle and ultracycle, 40 it introduces the concept of dynamic societal constitutionalism.The dynamic element of societal constitutionalism posits disequilibriumas the equilibrium state for societally constituted systems. Equilibriumis aberrational, though the coherence of the institutions within whichdynamic interaction happens is itself relatively stable. Theself-referencing communication at the core of dynamic institutionalcoherence creates conditions for a constant state of dynamic flux asstakeholders and the governance apparatus adjust behavior tomaximize welfare. Systemic integrity is grounded in the constitutionalnorms within which a governance unit is organized, but even these areconnected to frameworks of common standards shared by governanceunit stakeholders. Dynamic societal constitutionalism suggests that just

37. Larry Catd Backer, From Institutional Misalignments to Socially SustainableGovernance: The Guiding Principles for the Implementation of the United Nations' 'Protect,Respect and Remedy" and the Construction of Inter-Systemic Global Governance, 25 PAC.McGEORGE GLOBAL BUS. & DEV. L.J. 69 (2012) (analyzing an example of the framework of theU.N. Guiding Principles on Business and Human Rights). See also Inger-Johanne Sand,Polycontextuality as an Alternative to Constitutionalism, in TRANSNATIONAL GOVERNANCE ANDCONSTITUIONALISM, supra note 9, at 41.

38. See, e.g., Paul Schiff Berman, Jurisgenerative Constitutionalism: ProceduralPrinciples for Managing Global Legal Pluralism, 20 IND. J. GLOBAL LEGAL STUD. 665(2013).

39. For a recent, quite thought-provoking effort at both seeing the bowl and suggestingthe possibility of management, see Christian Joerges, Conflicts-Law Constitutionalism:Ambitions and Problems (ZENTRA Working Papers in Transnational Studies, No.10/2012), available at http://papers.ssrn.com/sol3/papers.cfm?abstract id=2182092 ("Thereare many ways to avoid, to suspend or to manage conflict constellations. If we identifyresponses which 'deserve recognition' because they are based upon considerations ofjusitce, we can adhere to the notion of law." Id. at 19).

40. See Gunther Teubner, Self-Constitutionalizing TNCs? On The Linkage Of "Private"And 'Public" Corporate Codes Of Conduct, 18 IND. J. GLOBAL LEGAL STUD. 617, 632-35(2011).

812

THE ENFORCEMENT OF HuMAN RIGHTS BY APPLE, INC.

as the absence of territory as a basis for constituting a governance spacehas made regulatory frameworks more fluid and permeable, it alsoreduces the importance of stability as a necessary ingredient forinstitutional coherence and societal stability.

After an introduction, Section I engages in framework setting, aconsideration that necessarily structures societies and their constitutionfrom a spatially static and inward-looking perspective. Thatinvestigation is divided into two parts: first, the parameters for theordering system of states and nonstate actors, and second, a briefconsideration of the constitution of corporate actors within thisframework. The specific object of the second part is the multinationalcorporation, an exemplar of a self-constituted enterprise at the center ofan autonomously constituted governance system, with its focus onApple, Inc.

Section II provides an illustration of a societally constitutedenterprise operating in three dimensional dynamic governance space; itseeks to describe the dynamics of societal constitution within dynamicpolycentric structures of effect and communication. The focus is Apple,Inc.; the context is the enforcement of international human rightsnorms through the governance activities of Apple Inc. and its supplychain, specifically the spaces where systems converge, harmonize, andcollide. The object is to consider a societally constituted governance unitoperating in three-dimensional space that is in constant motion, butwithin which the entity remains stable. Like the state within a dynamicinternational system, Apple Inc. assumes a central place around which,and through its operations, produces collisions between its societalconstitution, its formal place within the constitution of states, and itsfunctional role within the constitution of global economic society withinthis multidimensional governance space, and the permeability of itsoperations and structural coupling while retaining a stable internalgovernance framework. This suggests a dynamic element of societalconstitutionalism that tends to be overlooked in standard accounts thatposit a static governance universe, even if a layered one.

Section III then develops the more important characteristics of thisnew dynamic and permeable constitutional framework. If societies canbe understood as subject to certain principles for their inwardconstitution, to what extent might there be principles that affect theoutward expression of inward self-constitution? That considerationrequires both an examination of the way in which societally constitutedentities may be felt and seen by outsiders and also the way thatexpressive communication can have inward-affecting consequences. For

813


that purpose, Gunther Teubner's notions of addiction 4' and chaos42 andHans Lindahl's notions of spatiality and communication43 serve as astarting point. Proceeding from the intuitions derived from Section II, itdeepens the insights of a dynamic element within societalconstitutionalism. Thought of merely as a staticstructuring-conventional analysis may fail to capture the criticalimportance of structural coupling in defining both the autonomy ofsystems and their communicative intimacies among systems in acomplex polycentric constituting universe. Building on networks andirritants in the governance space, this section uses a recent episode inthe operations of Apple, Inc. as an example of the behavior of systemswithin a governance space characterized by fragmentation, fluidity,polycentricity, and permeability. 44 The example may illustrate apossible difference between public and private constitutional spaces.Public law-based constitutionalism, positing stasis and equilibrium asthe normal state, 45 treats conditions of disequilibrium, a constant stateof change or revolution, as aberrational. 46 Equilibrium is a sign of

41. See Gunther Teubner, Legal Irritants: Good Faith in British Law or How UnifyingLaw Ends Up in New Divergences, in THE EUROPEANISATION OF LAW: THE LEGAL EFFECTS

OF EUROPEAN INTEGRATION 243 (Francis G. Snyder ed., 2000).42. Gunther Teubner, A Constitutional Moment? The Logistics of 'Hit the Bottom,' in

AFTER THE CATASTROPHE: ECONOMY, LAW AND POLITICS IN TIMES OF CRISIS (Poul F. Kjaer& Gunther Teubner eds., 2010).

43. See Hans Lindahl, The Boundaries of Legal Orders in a Postnational Setting:Conceptual, Normative and Institutional Issues, in THE LAW OF THE FUTURE AND THEFUTURE OF LAW 355 (Sam Muller et al. eds., 2011), available at http://www.fichl.org/fileadmin/fichl/documents/FICHL_11_Web.pdf.

44. See Larry Cata Backer, The Structural Characteristics of Global Law for the 21stCentury: Fracture, Fluidity, Permeability, and Polycentricity, 17 TILBURG L. REV. 177(2012).

45. "[I]ndeed, it has always seemed to me that a primary purpose of constitutionalismis precisely to entrench certain principles and structures against change, particularchange driven by popular pressure." Ernest A. Young, Popular Constitutionalism and theUnderenforcement Problem: The Case of National Healthcare Law, 75 LAW & CONTEMP.PROBS. 157, 185 (2012). See also Russell Muirhead & Nancy L. Rosenblum, The PartisanConnection, 3 CAL. L. REV. CIRCUIT 99 (2012) ("The purpose of eighteenth-centuryconstitutionalism was twofold, and each purpose was in tension with the other; on onehand, to facilitate popular power and empower 'the common, recognizable interests ofordinary people, and nothing more.' On the other, to constrain popular power to ensurethat majorities could not overwhelm the 'permanent and aggregate interests of thecommunity,"' id. citing in part Philip Pettit, Democracy, Electoral and Contestatory, in 42NOMOS: DESIGNING DEMOCRATIC INSTITUTIONS 134 (Ian Shapiro & Steven Macedo eds.,2000)); THE FEDERALIST NO. 10 (James Madison) (Project Gutenberg Etext ed. 1992),available at http://thomas.loc.gov/home/histdox/fedpaper.txt.).

46. It is easiest to contrast the equilibrium and stability of constitutionalism withnotions of permanent revolution best described by Leon Trotsky. Leon Trotsky, ThePermanent Revolution (1931), available at http://www.marxists.org/archive/trotsky/1931/

814


system integrity and success. 47 Dynamic societal constitutionalismproduces a more complex model of the well-known but utterly twodimensional "living constitution"48 through which mass preferences arein constant dialogue with common norms to produce stable governanceunder conditions of constant change that may or may not be dependenton the state or any specific judicial apparatus.49

The paper concludes where it started-in constitutional theory. Itsuggests the need to expand our understanding of constitutional theorybeyond incarnation and judgment, to include communication amongsystems in a complex polycentric constituting universe. It suggests thedynamic consequences of this emerging societal framework ofhierarchical power arrangements and horizontal effects forconstitutional theory among this amalgam of states and other societallyconstituted organisms.

tpr/pr-index.htm (ast visited Aug. 13, 2013) ("The permanent revolution, in the sensewhich Marx attached to this concept, means a revolution which makes no compromisewith any single form of class rule, which does not stop at the democratic stage, which goesover to socialist measures and to war against reaction from without: that is, a revolutionwhose every successive stage is rooted in the preceding one and which can end only in the

complete liquidation of class society."). These might also have been in evidence during theChinese Cultural Revolution. See Mo Jihong, The Constitutional Law of the People'sRepublic of China and Its Development, 23 COLuM. J. ASIAN L. 137 ("The 1975 and 1978Constitutions were influenced by the extreme leftist sentiments of the CulturalRevolution, which promoted a theory of continuing revolution under proletariandictatorship, inconsistent with the basic principles of modern constitutionalism." Id. at

139). Both have been rejected by notions of stability inherent in Western and Chineseconstitutionalism, through policies of "general welfare" and "harmonious society."

47. See, e.g., William H. Rehnquist, The Notion of a Living Constitution, 54 TEX. L.REV. 693, 704-06 (1976) (on the judicial role in promoting constitutional stability).

48. Two-dimensional in the sense that communication is abstracted through theinstitutions of the state separated by function and each constructed to represent an aggregate

understanding of popular sentiment. See, e.g., William C. Heffernan, ConstitutionalHistoricism: An Examination of the Eighth Amendment Evolving Standards of Decency Test, 54AM. U. L. REV. 1355 (2005) ("Advocates of the concept of a 'living constitution,' for example,reason in terms of a body of constantly remade constitutional doctrine-surely an unhelpfulapproach given the continuity and stability characteristic of most areas of constitutional law."Id. at 1363); see also Paul Brest, The Intentions of the Adopters Are in the Eyes of the Beholder,in THE BILL OF RIGHTS: ORIGINAL MEANING AND CURRENT UNDERSTANDING 17-18 (Eugene W.Hickok, Jr. ed., 1990) (focusing on stability and flexibility).

49. See, e.g., Gunther Teubner, Societal Constitutionalism: Alternatives to State-CenteredConstitutional Theory?, in TRANSNATIONAL GOVERNANCE AND CONSTITUTIONALISM 3, 26-27(Christian Joerges, Inge-Johanne Sand & Gunther Teubner eds., 2004). For a good discussionof the germinal literature from which these ideas arise, see David Nelken, Eugen Ehrlich,Living Law, and Plural Legalities, 9 THEORETICAL INQUIRIES IN LAW 443 (2008).

815


I. CONSTITUTING A SOLAR SYSTEM OF ACTORS

No discussion of the ordering systems of self-constituting societies ispossible without a sense of the normative framework within which thisself-constituting and the communication between these self-constitutingorgans exist.50 This section briefly suggests the contours within whichsocieties constitute themselves and the way in which their legitimacy isjudged. It then describes the normative framework within which humanrights are recognized and governed. Finally, it identifies the variousconstitutional societies that together map the polycentric system withinwhich human rights specific governance exists.

A. An Ordering System of States and Nonstate Actors: The StartingPoint for State and Societal Constitutionalism

Constitutionalism itself, whether in the form of the narrowstate-based constitutionalism or the broader concepts of societalconstitutionalism, remains a contested idea, even when connectedentirely to the state and the political,5 ' and especially when it is appliedautonomously to nonstate actors.52 The state, itself, as the frameworkinto which constitutionalism is projected, has been unmasked ascontingent and fragile, sometimes irrelevant. 53 Constitutionalism's

50. 'The thesis is: the emergence of a multiplicity of civil constitutions. The constitution ofworld society does not come about exclusively in the representative institutions of internationalpolitics, nor can it take place in a unitary global constitution which overlies all areas of society,but, instead, emerges incrementally in the constitutionalisation of a multiplicity of autonomoussub-systems of world society." Teubner, supra note 9, at 8.

51. Constitutionalism in this context is discussed in Backer, supra note 21. Its arresteddevelopment within state ideology constructs is discussed in Mattias Kumm, The CosmopolitanTurn in Constitutionalism: An Integrated Conception of Public Law, 20 IND. J. GLOBAL LEGALSTUD. 605 (2013). See also Reza Dibadj, Panglossian Transnationalism, 44 STAN. J. INT'L L. 253(2008).

52. Ulrich K Preuss, Disconnecting Constitutions from Statehood: Is GlobalConstitutionalism a Viable Concept, in THE TWILIGHT OF CONSTITIONALISM, supra note 20,at 23, 43.

53. See generally Peter T. Leeson & Claudia R. Williamson, Anarchy and Development:An Application of the Theory of Second Best, 2 LAW & DEV. REV. 75 (2009) ("[Clonditionalon failure to satisfy a key institutional condition required for ideal politicalgovernance-constrained politics-citizens' welfare is maximized by departing from theother conditions required for this form of governance: state-supplied law and courts,state-supplied police, and state-supplied public goods."); Ken Menkhaus, GovernanceWithout Government in Somalia: Spoilers, State Building, and the Politics of Coping, 31INT'L SECURITY 74 (2007) (explaining that Somalia has been without a functional centralgovernment since 1991); Larry CatA Backer, Of Somali Pirates, Global Corporations andthe State: Governance Without Government, Government Without a State and MilitaryPower, LAW AT THE END OF THE DAY (June 28, 2009, 5:04 PM),

816


connection to law has also spawned substantial debate. 54 The debateintensifies when the logic and ideology of state-centered law is used toattempt to domesticate nonlaw governance systems. 5 5 More importantly,its application to nonstate actors generates a substantial amount ofcontroversy as well.5 6 Even when there is a concession to the idea thatconstitutionalism itself is not inherently bundled with the constructionof political states, there is a concern that its own self constitution maybe impeded in part by the state from which it arose or the marketwithin the orbit of which it may disintegrate.57 Moreover, the basic issueof constitutionalism-defining the borders of self-constructedconstitutionalist orders-remains acute.58 Deterritorialization may alsoboth strengthen5 9 and weaken6 0 national political constitutionalism.

http://1cbackerblog.blogspot.com/2009/06/of-somali-pirates-global-corporations.html(viewing the recent ransoming of a ship by Somali pirates as an example of the overlap ofprivate and public regimes, nonstate governments, traditional states, and nonstateentities as regulators).

54. See, e.g., Jaye Ellis, Constitutionalization of Non-Governmental Certification Programs,20 IND. J. GLOBAL LEGAL STUD. 1035 (2013); Anna di Robilant, Genealogies of Soft Law, 54 AM.J. COMP. L. 499 (2006); Craig Scott, Transnational Law' as Proto-Concept: Three Conceptions,10 GERmAN L.J. 877 (2009).

55. E.g., Ming-Sung Kuo, Taming Governance with Legality? Critical Reflections UponGlobal Administrative Law as Small-C Global Constitutionalism, 44 N.Y.U. J. INT'L L. &POL. 55 (2011).

56. See, e.g., Christopher Thornhill, A Sociology of Constituent Power: The PoliticalCode of Transnational Societal Constitutions, 20 IND. J. GLOBAL LEGAL STUD. 551 (2013)("Transnational societal constitutions, it is claimed, in fact remain instruments, albeit at ahigh level of dispersal, for the societal allocation and distribution of power. Furthermore,the paper argues that transnational societal constitutions reproduce themselves throughan intensification of the inclusionary and power-producing functions of rights alreadyestablished in national-state constitutions.").

57. See Emilios Christodoulidis, On the Politics of Societal Constitutionalism, 20 IND. J.GLOBAL LEGAL STuD. 629 (2013) (describing how distance from the state may undercut itsgrounding and the power of the market may capture it, producing mutual thwartingrather than engagement).

58. See Saskia Sassen, Visible Formalizations and Formally Invisible Facticities, 20 IND. J.GLOBAL LEGAL STUD. 3 (2013). Indeed, yet in Africa, internationalization andde-territorialization might appear to aid the process of strengthening the state. See alsoCharles Manga Fombad, Internationalization of Constitutional Law and Constitutionalism inAfrica, 60 AM. J. COMP. L. 439, 463-71 (2012).

59. See, e.g., Hans Lindahl, We and Cyberlaw: The Spatial Unity of Constitutional Orders,20 IND. J. GLOBAL LEGAL STUD. 697 (2013) ("[T]o claim that spatial boundaries are no longer aconstituent feature of post-state legal orders is effectively to hold that the boundaries of theterritorial state, or of earlier spatially bounded communities, exhaust the manner in whichlegal orders close themselves into an inside vis-A-vis an outside").

60. See, e.g., Anne Peters, Compensatory Constitutionalism: The Function andPotential of Fundamental International Norms and Structures, 19 LEIDEN J. INT'L L. 579,580 (2006) (explaining how regionalization, global networks, and de-territorialization arecontributing to de-constitutionalization on the domestic level).

817


Indeed, the connection between constitutions and the state may serve toreduce the relevance constitutionalism itself as the normative orstructuring vehicle for the organization of governance unitsinstitutionalized into something that resembles but is not government. 61

Constitutionalism, whether or not detached from the state, 62 framesa discussion about the organization of power. When individualsaggregate something-power, capital, goods, labor, or anything else ofmutual benefit-those individuals, and others who deal with thisaggregation, face a fundamental difficulty in two parts. The first partinvolves reification; a constituted society must understand itself to existand others must understand the nature of this existence in the sameway.63 For example, the corporation is manifested through its financialstatements (rather than, for example, through reports about its impactson the social, economic, or environmental impacts of its activities onothers), which produces a very specific way of manifesting corporationsthat is in line with normative assumptions about its "nature."64

Likewise, the state is manifested to foreigners by its borders and to itsinhabitants by its police powers, each shaped by the assumptions aboutthe "nature" of the state. This implicates two issues: one involving theconstruction of an autonomous consciousness of this aggregation (itsgovernment), and the other involving the acts and forms required tomake the aggregation "seen and felt" by others (people who arestrangers to the constitution of an aggregation).65 Internal and externalrecognition are the first markers of the constituting entity. Form andfunction in the construction of the felt realities of these aggregations

61. See Riccardo Prandini, The Future of Societal Constitutionalism in the Age ofAcceleration, 20 IND. J. GLOBAL LEGAL STUD. 731 (2013) (challenging the state constitutionalistconcepts that constitutions are legitimized through consent of the state's subjects, thatconstitutions are structures for managing and constraining power, and that constitutionsinstitutionalize a permanent relationship between governance apparatus and its subjects).

62. Cf. Neil Walker, The Idea of Constitutional Pluralism, 65 MOD. L. REV. 317 (2002).63. See, e.g., Roman Guski, Autonomy as Sovereignty: On Teubner's Constitutionalization of

Transnational Function Regimes, 11(2) INT. J. CONST. L. 523-36 (2013). See generally GUNTHERTEUBNER, LAW As AN AUTOPOIETIC SYSTEM (Zenon Bankowski ed., Anne Bankowska & RuthAdler trans., 1993); Gunther Teubner, Hypercycle in Law and Organization: The RelationshipBetween Self-Observation, Self-Constitution and Autopoiesis, in EUROPEAN YEARBOOK IN THESOCIOLOGY OF LAW 43 (Alberto Febrajjo ed., 1988).

64. These assumptions serve as the foundation for corporate disclosure under the U.S.federal securities laws, see, for example, Reg. S-X, 17 C.F.R. Part 210, and are also thefoundation of investor views of the corporation-that is, the sum of its financialcharacteristics.

65. There is a parallel here to the notion of recognition of states in international law.See Montevideo Convention on Rights and Duties of States art. 1, Dec. 26, 1933, 165L.N.T.S. 19 (listing requirements for recognizing personhood with its basis in acquiring allthe characteristics that the community of like constituted organizations recognize asessential for self constitution).

818


remain a lively topic of debate between "institutionalists" concernedwith the organization of the apparatus of self-constitution,66 thoseworried about inclusion in the process of self-constitution,67 and the"anarchists" concerned with the dismantling of power-hierarchy systemsin favor of polycentric and horizontally-aligned inter-connectedsystems. 68

The second part of aggregation by individuals involves normativevalues that implicate system legitimacy. Legitimacy, like reification, canalso be understood in two aspects. The first aspect involves the adoptionof processes that remove the operation of governance organs from thecontrol of individuals. That is, the organization is operated to maximizethe welfare of the organization (or of its members understood as allmembers) in a manner that avoids arbitrary decision-making oroperation for the benefit of some individuals rather than for thecommunity as a whole. This is sometimes understood under notions ofRechtsstaat, or process rule of law.6 9 It is criticized as a move towardauthoritarian managerialism. 7 0 The second aspect involves the valuesthat are meant to be advanced under legitimate process systems. TheseSozialstaat notions have become central to the ideals of legitimacy inthe construction of aggregations that have become self-constitutingactors.7' For political organs, like states, those notions are the productof the shared values of the national community, but they may also betempered by limiting norms and values of the international community,memorialized in the pronouncements of international organizations and,more narrowly, by international law.72 This latter project can be

66. Institutionalists cross the political spectrum from Stalinists to free marketadvocates. See Larry Cati Backer, Economic Globalization Ascendant and the Crisis of theState: Four Perspectives on the Emerging Ideology of the State in the New Global Order, 17BERKELEY LA RAZA L.J. 141 (2006).

67. See, e.g., Gavin W. Anderson, Societal Constitutionalism, Social Movements, andConstitutionalism from Below, 20 IND. J. GLOBAL LEGAL STUD. 881 (2013).

68. For a modern articulation of this debate in the constitutionalist setting, see SakiBailey & Ugo Mattei, Social Movements as Constituent Power: The Italian Struggle for theCommons, 20 IND. J. GLOBAL LEGAL STUD. 965 (2013). See generally the essays in THEANARCHIST COLLECTIVES: WORKERS' SELF-MANAGEMENT IN THE SPANISH REVOLUTION1936-1939 (Sam Dolgoff ed., 1990).

69. Rule of law is a vast topic beyond the scope of this essay. For a discussion of therule of law in globalization, for example, see SCHNEIDERMAN, supra note 14, at 205-22;ASIAN DISCOURSES OF RULE OF LAW (Randall Peerenboom ed., 2004).

70. See Joerges, supra note 39.71. On substantive rule of law, see, e.g., RANDALL PEERENBOOM, CHINA'S LONG MARCH

TOWARD RULE OF LAW 2-55 (2002) (exploring substantive constitutionalism through theprism of rule of law concepts).

72. See Backer, supra note 27, at 17; Cheryl Saunders, Towards a Global ConstitutionalGene Pool, 4 NA'L TAIWAN U. L. REV. 1, 18 (2009).

819


problematic and has been criticized as a Western project of normativeneo-colonialism.73 For nonstate actors, the values framework may berelated specifically to the objectives that brought the communitytogether.74

Organization and legitimacy, then, mark the constitutional project.And it is a project bounded by text-however broadly constructed.75 It ishardly enough to merely treat constitutionalism as an internal act; ithas an external aspect as well. Constitutionalism requires the formationof an autonomous organization by the members of the enterprise (state,corporation, religious body) that is recognized as such by othercommunities that will have to deal with this entity.76

Constitutionalism as weltanschauung contains within itits own ontology (a descriptive model of legitimateconstitutions), explanations (the purpose ofconstitutions), objectives (the ultimate aim ofconstitutions), values (constitutional ethics),methodology (a theory of action or means of obtainingthe goals of constitutions), epistemology (a theory ofknowledge, of figuring out true and false constitutions),and its own etiology (an account of the building blocks ofconstitutions). 77

Critical to this complex set of organizing presumptions for societalconstitutions is the fundamental premise of consent. Societallyconstituted organizations are grounded in the consensual act of a groupthat comes together for the purposes all members agree upon and thatthen institutionalizes that aggregation so that the society createdbecomes something that is autonomous of its members and is recognized

73. Yadh Ben Achour, L'Internationalisation du Droit Constitutionnel [Internationalizationof Constitutional Law], in 16 L'INTERNATIONALISATION DU DROlT CoNSTITUTIoNNEL: RECUELDES COURS [INTERNATIONALIZATION OF CONSTITUTIONAL LAW: COLLECTION OF COURSE] 22(2007) (recognizing the neo-colonialist character but arguing that it appears in more palatableform); Backer, supra note 27, at 16-17.

74. See Larry CatA Backer, Multinational Corporations as Objects and Sources ofTransnational Regulation, 14 ILSA J. INTL & COMp. L. 499 (2008).

75. Cf. Ino Augsberg, Reading Law: On Law as a Textual Phenomenon, 22 L. &LITERATURE 369 (2010) (describing systems themselves as a form of textuality).

76. See generally Backer, supra note 21. Notions of incarnation as a basis for corporateautonomy have been suggested. See Saru M. Matambanadzo, The Body, Incorporated, 87TUL. L. REV. 457 (2013). These ideas parallel those long advanced in public law. See, e.g.,ERNST H. KANTOROWICZ, THE KING'S Two BODIES: A STUDY IN MEDIEVAL POLITICALTHEOLOGY (1957) (on nonstate collective personality, see id. at 273-313).

77. Backer, supra note 21, at 720.

820


as such by those with whom it must deal.78 Beyond this simpleconstituting condition lies much of the methodological and substantivedetail of foundational organization understood as constituting anautonomous body.79

I have earlier suggested a topology for this fundamentalunderstanding of the constitutionalist project for states.80 I have alsosuggested its utility in the analysis of self-constituting nongovernmentalgroups-principally nonstate corporate actors.8 ' Once one assumesaway the fundamental ordering principals of states-that they exist asunique organizations of power fused from the union of people andterritory from which all other organizations are derived, or if notderived, that can govern only through deployment of measures that areless legitimate or authoritative (less than law)-the possibilities ofordering the constitutions of organizations without a state becomeclearer. The organizational element of a nonstate constitution centerson four principal characteristics: (1) scope of authority, (2) institutionalautonomy, (3) regulatory authority, and (4) effectiveness of power tosettle disputes. 82 These have a constitutional element-the organizingprinciples that give the regulatory community form and set itsorganizational boundaries.83 These boundaries include the constitutionof a government apparatus and the rules for the operation of thegovernance power vested in this organization. They also havesubstantive and process elements, including the rules, laws, and other

78. This is what I have previously argued as the essence of the substantive orconstitutional component of transnational law. See Larry Catd Backer, Principles ofTransnational Law: The Foundations of an Emerging Field, Law at the End of the Day,Mar. 9, 2007, available at http://cbackerblog.blogspot.com/2007/03/principles-of-transnational-law.html. But others see in this a methodological component that then creates aspace for regulatory institutionalization within networks of governance systems. SeeGRALF-PETER CALLIESS & PEER ZUMBANSEN, ROUGH CONSENSUS AND RUNNING CODE: ATHEORY OF TRANSNATIONAL PRIVATE LAW (2010); Peer Zumbansen, Transnational Law,Evolving (Dec. 15, 2011), Osgoode CLPE Research Paper No. 27/2011 (revising a priorversion produced for the Elgar Encyclopedia of Comparative Law (Jan Smits, ed., 2006)).

79. See Peer Zumbansen, Transnational Law, Evolving (Osgoode Hall Law Sch.Comparative Research in Law & Political Econ., Research Paper No. 27/2011), available athttp://ssrn.com/abstract=1975403.

80. Backer, supra note 21, at 720.81. See generally Larry Catd Backer, Transnational Corporate Constitutionalism: The

Emergence of a Constitutional Order for Economic Enterprises, Soc. Scl. RES. NETWORK(April 10, 2012), available at http://papers.ssrn.com/sol3/papers.cfm?abstractLid=2038081(exploring the emerging principles of transnational constitutionalism as a basis for theorganization and integration of economic enterprises).

82. See Larry CatA Backer, Principles of Transnational Law: The Foundations of anEmerging Field, Law at the End of the Day (Mar. 9, 2007), available at http://1cbackerblog.blogspot.com/2007/03/principles-of-transnational-law.html.

83. Id.

821


norms that are produced or administered by the community and theprocess rules through which they are applied, enforced, constructed, andinterpreted. 84

The normative elements are grounded in legitimacy, and touch onthose structures that make it possible both to "see" the self-constitutingenterprise and to treat it, both inside and outside, as a "thing"legitimately apart from its stakeholders.8 5 These societally constitutedenterprises, then, are structured as a system of taxonomy andlegitimation that is grounded in a set of normative assumptions aboutthe purpose of government and its connection to governance. One canunpack this system in the form of five core elements: Constitutionalismcan be understood (1) as a system of classification; (2) the core object ofwhich is to define the characteristics of constitutions (those documentsthat organize governance power within an institutional apparatus); (3)to be used to determine the legitimacy of the constitutional system asconceived or as implemented; (4) based on rule of law as thefundamental postulate of government (that government be establishedand operated in a way that limits the ability of individuals to usegovernment power for personal welfare maximizing ends); and (5)grounded on a metric of substantive values derived from a sourcebeyond the control of any individual.8 6

This framework is applicable to all self-constituting governancesystems in which the organization of governance is overseen by aninstitutional apparatus of some kind. But the resulting fracture anddecentering of the state has been criticized as well.87

Constitutionalism of this sort provides a point ofconvergence between public and private governancesystems. It offers both norm and technique in theconstitution of governance that is not limited by theconceptual blinders of a state system that, through itsimposition of hierarchy of legitimacy, reserves only tothe state the power of self constitution and regulatory

84. See GRALF-PETER CALLIESS & PEER ZUMBANSEN, ROUGH CONSENSus AND RUNNINGCODE: A THEORY OF TRANSNATIONAL PRIVATE LAW (2010) (exploring the shiftinginstitutional and normative landscape of legal norm-creation).

85. See Backer, supra note 82.86. Backer, supra note 21, at 679.87. See generally Petra Dobner, On The Constitutionability of Global Public Policy

Networks, 16 IND. J. GLOBAL LEGAL STUD. 605, 613-17 (2009).

822


autonomy enforced through territorially basedenforcement units.88

B. An Amalgamation of Governments: The Multinational Corporation

Societal constitutionalism, then, represents an articulation of ageneral framework of governance power that is not dependent-that isnot grounded in the first instance-on the state as the model fromwhich governance and its institutionalization is understood and shaped.The constitutional natures of nonstate organizations are revealedbeyond the veiling presumptions of the state system.89 Like states, theseorganizations comprise internally coherent, closed, self-reflexivesystems grounded in a set of norms that provide the basis of systemicconstitution and the filter through which communication with outsidesystems may be effectuated.9 0

Among the most interesting of these nonstate organizations is themultinational corporation: a society that is both self-constituted andembedded at the center of a web of governance rules from which theseenterprises draw to develop their own autonomous and autonomouslyapplied governance systems.9 ' Self-constitution is possible preciselybecause the multinational corporation thrives in governance spacesbetween states, beyond international law, and among both,92 operatingconditions made possible under globalization. 93

88. Backer, supra note 66, at 117 ("It also suggests that beyond organizing norms andlegitimating processes that avoid arbitrary and personal capture of power, constitutingpower can be organized simultaneously under any number of normative (value)frameworks.").

89. By veiling presumptions, I mean the set of basic premises that tend to obscure theprivilege built into the system in favor of states. These presumptions build a sense that thesubordination of enterprises and other organizations ot states is "natural" and that "law"produced by states is "naturally" the touchstone for legitimate expression of a popular will. SeeLarry CatA Backer, On the Tension between Public and Private Governance in the EmergingTransnational Legal Order: State Ideology and Corporation in Polycentric Asymmetric GlobalOrders (Apr. 16, 2012), available at SSRN: http://ssrn.com/abstract-2038103 orhttp://dx.doi.org/lO.2139/ssrn.2038103. For an analysis of a similar autonomous organism, Gap,Inc., see generally Backer, supra note 74.

90. This touches on what Gunther Teubner describes as systemic hypercycles andultracycles. See Teubner, supra note 40, at 634 ("A hypercycle emerges whencommunicative operations within a closed network form cycles that are interlinked in acircular way. In contrast, an ultracycle emerges when a cycle of mutual perturbations isdeveloped between closed networks.").

91. See, e.g., id. at 621-28.92. See Larry CatA Backer, The Autonomous Global Corporation: On the Role of

Organizational Law Beyond Asset Partitioning and Legal Personality, 41 TULSA L. REV.541 (2006) (arguing that the nexus of multinational enterprises and globalization provides

823


Self-regulation follows from the application of theterritorial principle, coupled with the possibilities ofenterprise autonomy reinforced by asset partitioningregimes, self-ownership, and juridical personhood. Anautonomous legal subject, responsible for its ownobligations and able to direct itself can, by distributingits operations in accordance with the benefits ofparticular territorially limited legal regimes, effectivelychoose the mix of regulation to which it will submititself. It follows that such an enterprise can regulateitself. A fully self-conscious autonomy is now complete. 94

The embedding of multinational corporations within multiple andpolycentric governance structures can be identified from out of theprincipal regulatory frameworks within which they operate. The firstframework form includes internal systems of supply chain governancecreated by large multinational enterprises.95 The second frameworkform is the emerging system of soft law governance principles96

developed under the auspices of the Organization for EconomicCooperation and Development (OECD), and, principally, the OECD'sGuidelines for Multinational Enterprises.97 The third form is theprinciples-based U.N. Guiding Principles for Business and HumanRights, which details a human rights due diligence framework for theregulation of the human rights obligations of multinational

a foundation for the emergence of self-conscious, autonomous, self-regulating economicenterprises).

93. See, e.g., Paul Schiff Berman, Federalism and International Law Through the Lensof Legal Pluralism, 73 MO. L. REV. 1151 (2008); Kevin T. Jackson, The Normative Logic OfGlobal Economic Governance: In Pursuit Of Non-Instrumental Justification For The RuleOf Law And Human Rights, 22 MINN. J. INT'L L. 71. (2013).

94. Id. at 561.95. See generally Larry CatA Backer, Economic Globalization and the Rise of Efficient

Systems of Global Private Law Making: Wal-Mart as Global Legislator, 39 CONN. L. REV.1739 (2007); Tim Bartley, Institutional Emergence in an Era of Globalization: The Rise ofTransnational Private Regulation of Labor and Environmental Conditions, 113 AM. J.Soc. 297 (2007).

96. See, e.g., Martin Marcussen, OECD Governance Through Soft Law, in SoFn LAW INGOVERNANCE AND REGULATION 103 (Ulrika Morth ed., 2004); David Weissbrodt, KeynoteAddress: International Standard-Setting on the Human Rights Responsibilities ofBusinesses, 26 BERKELEY J. INT'L L. 373 (2008).

97. See Org. for Econ. Co-Operation & Dev. [OECD], OECD Guidelines forMultinational Enterprises: 2011 Edition (May 25, 2011), available at http://www.oecd.org/daf/internationalinvestment/guidelinesformultinationalenterprises/48004323.pdf[hereinafter OECD Guidelines].

824


corporations,98 elaborated by John Ruggie, the United Nation'sSecretary General Special Representative.99

Self-referential governance communities are narrowly constructed,and functionally differentiated communities. 00 Functionaldifferentiation suggests a limited framework of governance. Nonstategovernance systems have a limited range. Functional differentiationalso suggests a simultaneous overlapping of governance. At the sametime, these are new and fragile systems. They are not fully developed.They may change. They have their systems sociology.10 ' But they alsoproduce a space within their demarcated functionality that isconstitutionally sufficient for governance. This space is constitutedinstitutionally through a governance apparatus grounded in rule of lawprinciples,102 in the sense of both process rule of law (systems createdthat legitimate the operations of the apparatus on the basis of rules forproducing rules and enforcing them) and substance rule of law (rulesare created in accordance with a process in which the membersparticipate and reflect shared values that reflect communitypreferences). 103

So constituted, the multinational corporation operates substantiallylike the state, though a state without a territory.104 It responds to thedesires of its citizens, investors, and consumers through the productionof policy and behaviors designed to enhance shareholder value andconsumer demand. Shareholder desires are also affected by a normativeframework exogenous to the multinational--one memorialized inbinding and nonbinding instruments of international and national law,as well as other normative standards, sometimes bound up in concepts

98. See Special Representative of the Secretary-General on the Issue of Human Rights& Transnational Corps. & Other Bus. Enters., Guiding Principles on Business and HumanRights: Implementing the United Nations 'Protect, Respect and Remedy" Framework,Human Rights Council, U.N. Doc. A/HRC/17/31 (Mar. 21, 2011) (by John Ruggie),available at http://www.business-humanrights.org/medialdocuments/ruggie/ruggie-guiding-principles-21-mar-2011.pdf.

99. See John Gerard Ruggie, Business and Human Rights: The Evolving InternationalAgenda, 101 AM. J. INT'L L. 819 (2007).

100. See Backer, supra note 74.101. See generally NIKLAS LUHMANN, SOCIAL SYSTEMS, (John Bednarz, Jr. & Dirk

Baecker trans., Stanford Univ. Press 1995) (1984) (reproducing the new systems theory ofself-reference within sociology).

102. See Terry Collingsworth, Beyond Public Relations: Bringing the Rule of Law toCorporate Codes of Conduct in the Global Economy, 6 CORP. GOVERNANCE 250 (2006).

103. Consider in this light the apparatus of a company like Gap, Inc., described inBacker, supra note 74, at 509-23.

104. Jean-Philippe Rob6, Multinational Enterprises: The Constitution of a PluralisticLegal Order, in GLOBAL LAW WITHOUT A STATE, supra note 26, at 45, 45-47, 52-56.

825


of corporate social responsibility and human rights. 105 These policies areaffected within the entity and its supply chain through contracts of aregulatory character. Compliance is enforced directly by the entity andalso monitored by outsiders, principally civil society elements, and tosome more remote extent, the state and other public actors.10 6 Thethreat of state intervention is also a disciplinary force.10 7 Civil societyactors gain legitimacy in their enforcement function throughrelationships with the media-an organ that is at once both a producerof similar norms within its own enterprise and a producer of"sanctioned" information.1 08 But civil society also competes with thecorporate regulator in the construction of investor and consumer tastes

105. See, e.g., Florian Wettstein, Beyond Voluntariness, Beyond CSR: Making a Case forHuman Rights and Justice 114 BUS. & Soc'y REV. 125 (2009). "For several decades nowthe term 'corporate social responsibility' has been used in this context to describe amechanism by which companies take responsibility for their actions and encourage apositive impact through its activities on, inter alia, human rights." COUNCIL OF EUROPE,STEERING COMMITTEE ON HUMAN RIGHTS, Human Rights and Rule of Law, CorporateSocial Responsibility in the Field of Human Rights, Presentation, available athttp://www.coe.int/t/dghl/standardsetting/hrpolicy/other-committees/hr and-business/defaultEN.asp. For the Report, see STEERING COMMITTEE FOR HUMAN RIGHTS (CDDH),Feasibility Study On Corporate Social Responsibility In The Field Of Human Rights, 76the meeting Strasbourg 27-30 Nov. 2012, Addendum VII CDDH(2012) R76, available athttp://www.coe.int/t/dghl/standardsetting/hrpolicy/other-committees/hr-and-business/Documents/CDDH%282012%29R76_AddendumVIIEN.pdf.

106. See discussion, Section II, infra. There are emerging NGOs the primary purpose ofwhich is to monitor compliance with internally developed or third party standards. This isthe case, for example, of COVERCO, the Commisison for the Verification of Codes ofConduct, operating in Guatemala. What is COVERCO?, COVERCO, available athttp://www.coverco.org.gt/e_index.html (last visited Aug. 17, 2013). The Fair LaborAssociation website nicely explains the three-part nature of private enforcement in asupply chain context: (1) standard setting; (2) monitoring; and (3) technical assistance. SeeOur Work, Protecting Workers' Rights Worldwide, FAIR LABOR ASSOCIATION, available athttp://www.fairlabor.org/our-work. On the trend, generally, toward private enforcement,see, for example, Anne van Aaken, Trust, Verify, Or Incentivize? Effectuating PublicInternational Law Regulating Public Goods Through Market Mechanisms, 104 AM. Soc'YINT'L L. PROC. 153 (2010); Errol E. Meidinger, "Private" Environmental Regulation,Human Rights, And Community 7 BUFF. ENVTL. L.J. 123 (2000).

107. And states operate at the periphery of supply chain governance. See, e.g., PederMichael Pruzan-Jorgensen, Regulating Supply Chain Sustainability: What Would HaveBeen Unthinkable Only a Few Years Ago is Now the Order of the Day, GUARDIANSUSTAINABLE Bus. (Sept. 12, 2011, 11:51 PM), http://www.guardian.co.uk/sustainable-business/blog/regulating-supply-chain-sustainability (describing some tentative andprecisely narrow extensions of home state law to the supply chain relations ofmultinationals under the 2011 U.K. Bribery Act (bribery); the U.S. Dodd-Frank Act of2010 (conflict minerals); the California Transparency in Supply Chain Act (slavery andhuman trafficking); and the EU Flegt Law (illegally logged timber)).

108. Consider in this light the apparatus of a company like Gap, Inc., described inBacker, supra note 74, at 509-23.

826


and sometimes participates with the corporate entity in the constructionof its regulatory standards for its supply chain.109 Taken together, whatis produced is a complete governance framework operating beyond theterritory of the state but also within a very narrow governance space.

At the same time, the community of multinational corporations, as afunctionally differentiated community, may construct a self-referencingand autonomous regime of governance, though very narrowly focused,which is free of substantial state interference, except as a foreign bodywith which relations must be maintained.1 10 It is in this sense that theold foundational notions of territoriality, as the marker par excellence ofjurisdiction, lose coherence.' The territory of norm creation andenforcement within and among corporations can be conceived asbounded by the territory of the operations of that community. Theextra-territorial is that which lies beyond the normative framework ofcorporate governance, but the prime referent is no longer geography. Itis in that sense that one understands the receding of the state fromgovernance.

The OECD system of principles for the management of corporatebehavior beyond the domestic law of states creates a three-dimensionalgovernance "space" through networks of soft law systems developed bycomplex partnerships between states, international organizations thatserve them and global actors, and the global actors that form the core ofthe regulatory community.112 The clearest example is drawn from therecent work of the OECD's National Contact Point system for theenforcement of global soft law frameworks that radiate out from the

109. See, e.g., Erika N. Sasser et al., Direct Targeting as an NGO Political Strategy:Examining Private Authority Regimes in the Forest Sector, Bus. & POL., Dec. 2006, at 1,available at http:// www.bepress.com/bap/vol8/iss3/artl. See also Tim Bartley,Institutional Emergence in an Era of Globalization: The Rise of Transnational PrivateRegulation of Labor and Environmental Conditions, 113 AM. J. SOCIOL. 297, 300, 319(2007) (regarding campaigns against Nike).

110. See A. Claire Cutler, Private International Regimes and Interfirm Cooperation, inTHE EMERGENCE OF PRIVATE AUTHORITY IN GLOBAL GOVERNANCE 23 (Rodney Bruce Hall& Thomas J. Biersteker eds., 2002).

111. See Gefion Schuler, Effective Governance Through Decentralized Soft Implementation:The OECD Guidelines for Multinational Enterprises, 9 GERMAN L.J. 1753 (2008) (proposingthat effective governance is accomplished through multilevel partnership and decentralizedsoft-mediation based implementation).

112. And thus seeks to rebut the early conceptual critique: "[S]oft law expresses apreference and not an obligation that states should act, or should refrain from acting, in aspecified manner. The underlying assumption is that behavior, or forbearance frombehavior, in accordance with this preference will be directly beneficial to states." JOSEPHGOLD, INTERPRETATION: THE IMF AND INTERNATIONAL LAw 301 (1996). This governancespace is sometimes understood as "spaceless" in the sense that it moves governancebeyond territory, and thus beyond the premises that constrain lawmaking in the statesystem. See, e.g., Backer, supra note 81; Backer, supra note 89.

827


OECD's Guidelines for Multinational Corporations. 113 These principlestie autonomous multinational regulatory systems to the law systems ofstates in which they operate, but at the same time, institutionalize astateless space within which corporations may be subject to substantivenorm frameworks developed by public bodies.114 These frameworks drawtheir standards from multiple sources for the construction of anautonomous framework of governance that is made applicable to actorsas a supplement to their obligations under the law-systems of statesasserting territorial jurisdiction,115 much like Ralf Michaels suggests forlex mercatoria.116

The U.N. Guiding Principles for Business and Human Rights followthe pattern of OECD principles and rules but focus on the activities ofbusiness with human rights impacts. They do, however, recognize thepolycentricity of business conduct with respect to human rights impactand specifically acknowledge a space within which corporations may actautonomously but in compliance with normative frameworks developedin the "constitutional principles" embraced by corporations, as endorsedby their investors and consumers, and as expressed in international lawand norms." 7 More importantly, the Guiding Principles also establish a

113. See OECD Guidelines, supra note 97, at 67-78.114. See, e.g., U.K. Nat'l Contact Point for the OECD Guidelines for Multinational

Enters., Initial Assessment by the UK National Contact Point for the OECD Guidelines forMultinational Enterprises: Survival International and Vedanta Resources plc, BUSINESS &HUMAN RIGHTS RESOURCE CENTRE (Mar. 27, 2009), http://www.business-humanrights.org/Links/Repository/969215; U.K. Nat'l Contact Point for the OECDGuidelines for Multinational Enters., Final Statement by the UK National Contact Pointfor the OECD Guidelines for Multinational Enterprises: Complaint from SurvivalInternational Against Vedanta Resources plc, BUSINESS & HUMAN RIGHTS RESOURCECENTRE (Sept. 25, 2009), http://www.businesshumanrights.org/Links/Repository/266990;U.K. Nat'l Contact Point for the OECD Guidelines for Multinational Enters., Statement bythe United Kingdom National Contact Point (NCP) for OECD Guidelines for MultinationalEnterprises (NCP): Das Air, Gov.UK (July 21, 2008), http://www.berr.gov.uk/files/file47346.doc; U.K. Nat'l Contact Point for the OECD Guidelines for Multinational Enters., FinalStatement by the UK National Contact Point for the OECD Guidelines for MultinationalEnterprises: Afrimex (UK) Ltd, Gov.UK, (Aug. 28, 2008), http://www.berr.gov.uk/files/file47555.doc.

115. See Amitai Aviram, A Paradox of Spontaneous Formation: The Evolution of PrivateLegal Systems, 22 YALE L. & POL'Y REV. 1 (2004).

116. See generally Ralf Michaels, The True Lex Mercatoria- Law Beyond the State, 14IND. J. GLOBAL LEGAL STUD. 447 (2007) (arguing that the lex mercatoria heralds the shiftin global law from segmentary differentiation in different national laws to a functionaldifferentiation, as a law beyond the state).

117. Professor Ruggie noted early in the process of Guidelines formulation:The "protect, respect and remedy" framework lays the foundations forgenerating the necessary means to advance the business and humanrights agenda. It spells out differentiated yet complementary roles andresponsibilities for states and companies, and it includes the element

828


mechanism for communication between autonomous governancesystems-one internal to the constituted corporation and the otherexternal and affecting corporate operations within defined, butspatially-limited territories. 118 Mr. Ruggie suggests that multinationalcorporations can occupy multiple regulatory spaces that only togetherdefine a complete governance universe--one in which both law systemsand norm systems"z9 exist in a complex set of entwined horizontalrelationships. That leaves Mr. Ruggie in essentially new territory thatrejects the monopoly of law systems within states and the conception ofnorm systems as nonbinding. As incompatible systems, law and normsmust effectively find a way to communicate and to harmonize valuesand relevance for their constituting communities, whether these arecitizens, consumers, employees, or investors.

The importance of polycentric governance is also emphasized by thissystem.120 Yet, polycentric governance tends to obscure the reality ofemerging autonomous governance, mistaking communication amongsystems with limited jurisdictions for competitions for supremacy withina single vertically-oriented arrangement of power.121 Still, at leastwithin the context of the multinational corporation, it is possible tospeak of governance without government,122 where the latter term is

of remedy for when things go wrong. It is systemic in character,meaning that the component parts are intended to support andreinforce one another, creating a dynamic process of cumulativeprogress-one that does not foreclose additional longer-termmeaningful measures.

Special Representative of the Secretary-General on the Issue of Human Rights andTransnational Corporations and Other Business Enterprises, Opening Remarks on theConsultation on Operationalizing the Framework for Business and Human Rights,BUSINESS & HUMAN RIGHTS RESOURCE CENTRE (Oct. 5, 2009), http://www.business-humanrights.orgLinks/Repository/105128.

118. See Gunther Teubner, The Corporate Codes of Multinationals: CompanyConstitutions Beyond Corporate Governance and Co-Determination, in CONFLICT OF LAWSAND LAWS OF CONFLICT IN EUROPE AND BEYOND: PATTERNS OF SUPRANATIONAL ANDTRANSNATIONAL JURIDIFICATION 203 (Rainer Nickel ed., 2010) (exploring intermeshing).

119. Cf. Lisa Bernstein, Opting Out of the Legal System: Extralegal ContractualRelations in the Diamond Industry, 21 J. LEGAL STUD. 115 (1992); Robert C. Ellickson,Law and Economics Discovers Social Norms, 27 J. LEGAL STUD. 537, 540 (1998).

120. See generally Backer, supra note 36.121. See Jorg Friedrichs, The Meaning of New Medievalism, 7 EUR. J. INT'L REL. 475,

475 (2001) ("[M]edievalism is defined as a system of overlapping authority and multipleloyalty, held together by a duality of competing universalistic claims. . . . [T]hepost-international world is characterized by a complicated web of societal identities, heldtogether by the antagonistic organizational claims of the nation-state system and thetransnational market economy.").

122. For the classic formulation, see GOVERNANCE WITHOUT GOVERNMENT: ORDER ANDCHANGE IN WORLD POLITICS (James N. Rosenau & Ernst-Otto Czempiel eds., 1992);Backer, supra note 95.

829


meant to refer to the state. It is also possible to speak, to some extent, ofgovernment without a state as an element in the governance ofmultinational regulation. What emerge within the corporation are"self-sufficient, self-perpetuating and internally autonomous system[s]of social relations" contained within the framework of its functionallydifferentiated objectives. 123 It is possible to see the construction ofautonomous and self-referential social-norm systems outside of theshadow of the territorially-bound law-systems of states, but thesesystems also exist within a space richly populated by other systems ofsocial relations, the regulatory force of some of which affect the internaland external relations of the self-constituted corporate society.

II. Is THERE A SUN AROUND WHICH SOCIETAL CONSTITUTIONS ORBIT?

"The philosopher casts his eye over existence, and wishes to give it anew standard value; for it has been the peculiar task of all greatthinkers to be law-givers for the weight and stamp in the mint ofreality."124 For social organizations, constitutionalism offers the promiseof providing something approaching that principle. Yet organizingprinciples are personal to the organism that struggles against or acceptsthem. Only the struggle remains the same-over and over. These opensystems of multiple cycles constitute the matrix within which thehermeneutical projects of interpretation can occur and foundations canbe established, maintained, problematized, destroyed, and replaced. Butglobalization and the emerging societal constitutions of nonstate actorshave contributed to the complexity of systemic cyclicity. 125

One can test the utility of this emerging understanding of thegovernance frameworks of the globalized world order by considering anexample: the supply chain transparency policies of Apple Incorporated.The object is to understand not only how Apple is not merelyself-constituted autonomously of the states in which it operates, but tosuggest the importance of communication, conflict, and catastrophe inthe process of internal and external communication with other actors.

123. M. G. SMITH, CORPORATIONS AND SOCIETY 248 (1974).124. Friedrich Nietzsche, Thoughts Out Of Season Part II: The Use And Abuse Of

History & Schopenhauer As Educator, in THE COMPLETE WORKS OF FRIEDRICH NIETZSCHEVOL. II 130 (Oscar Levy, ed., Adrian Collins, M.A., trans., 1909).

125. See, e.g., Ronen Shamir, Corporate Social Responsibility: Towards a NewMarket-Embedded Morality?, 9 THEORETICAL INQUIRIES IN LAW 371 (2008) ("governance ispremised on facilitating 'private' forms of authority: corporations, trade andtechnical-professional associations, accountancy and credit rating agencies, andstandard-setting organizations are all increasingly assuming regulatory roles andintensively experimenting with novel forms of legality." Id. at 377). With these, of course,come distinctive forms of regulation, many without the backing of the state. Id. at 378.

830


The Apple example also provides a context for observing, in operation,the dynamic element of societal constitutionalism. It suggests that bothLindahl's spatiality and Teubner's permeability now apply withinorganisms that do not stand still long enough for the theorist tocontemplate its character in motionless space. It is the elements ofmotion, space, and permeability that suggest both the utility of societalconstitutionalism and its limits. It also suggests that there may be astrong difference between state and nonstate governance constitutions.Public law based constitutionalism, like much in Western law, positsequilibrium as the basic state of system operation. 126 Disequilibrium isviewed as a temporary state leading to equilibrium, which is a sign ofsystem integrity and success. Dynamic societal constitutionalism positsthe opposite for private governance constitutionalism-disequilibrium isthe equilibrium state. 127 Constitutional systems that are permeable,structured within intangible borders that are constantly being redrawn,define and redefine themselves over very short time horizons. 128

Systemic integrity is grounded in the constitutional norms within whicha governance unit is organized, but even these are connected toframeworks of common standards shared by governance unitstakeholders. Dynamic societal constitutionalism produces a "quicktempo" application of public law "living constitution" norms but with the

126. See, e.g., Rolf H. Weber & Shawn Gunnarson, A Constitutional Solution for InternetGovernance, 14 COLUM. Scl. & TECH. L. REv. 1 (2013) ("Constitutional principles, bindingleaders, and stakeholders alike generally establish stability by assuring a degree ofpredictability and encouraging legitimate expectations by those they govern." Id. at 63(citing in part Niklas Luhmann, Verfassung als evolutionire Errungenschaft, 9RECHTSHISTORISCHES J., 176, 181 (1990).); Imaculada Baviera, Employment Stability InSpanish Labor Law: Between Regulatory Tradition And Social Reality, 34 COMP. LAB. L. &POLY J 677 ("A traditional principle in Spanish labor law is employment stability."). Seealso Alexander Orakhelashvili, Legal Stability and Claims of Change: The InternationalCourt's Treatment of Jus ad Bellum and Jus in Bello, 75 NORDIC J. INT'L L. 371, 372(2006) (with respect to state claims of legal change because of the particular circumstancesof their claims under international law, "[tihe claims of legal change attendant to suchdevelopments contradict the idea that the legal framework must be viewed as coherentand predictable, not liable to change at each and every instance of the exercise of power.").

127. See discussion, infra, Part III.128. See Inger-Johanne Sand, Polycontextuality as an Alternative to Constitutionalism,

in TRANSNAT'L GOVERNANCE AND CONSTITUTIONALISM 41 (Christian Joerges,Inger-Johanne Sand & Gunther Teubner, eds., 2004). Cf. Boaventura de Sousa Santos,Law: A Map of Misreading. Toward a Postmodern Conception of Law, 14(3) J. L. & Soc.279-302 (1987) ("different legal spaces superposed, interpenetrated and mixed," id. at293); Julia Black, Constructing and Contesting Legitimacy and Accountability inPolycentric Regulatory Regimes (Feb. 2008), LSE Legal Studies Working Paper No. 2/2008,available at http://ssrn.com/abstract=1091783.

831


addition of the private governance dimension. 129 Apple suggests thecontours of that dynamism and the possibility of preserving systemintegrity even within structures of communication, permeability, andthree-dimensional governance spaces.

A. Apple and Governance Catastrophe: A Story of Crisis andTransformation in Three Dimensional Governance Space

Apple can be understood as a self-constituted organization existingautonomously of any one state. 130 Its scope of authority is bounded by itsbusiness objectives for which it is accountable to its shareholders andconsumers. Its institutional autonomy is bound up in the apparatus ofits corporate structures from which it derives its regulatory authoritythrough contracts within the value chain of its activities. Its aggregateoperations, assets, and markets are not completely directed by anystate, though all may be subject to the rules of any state in which Applechooses to operate.131 It can choose the style of its own constitution evenas it can choose the locus of the territory within which it will placeeverything from its principal offices to its smallest operations. It canalso determine the form of those relationships. Lastly, within thebounds of its authority, in the relationships with its suppliers, it hasdeveloped an effective power to settle disputes. 132 Apple's organizationhas a constitutional element-the organizing principles of itsgovernment apparatus and the rules for the operation of the governancepower vested in this organization. The normative elements of its rulesystems are themselves grounded in standards and values that aregenerally accepted 33 and reflect the value standards of its investors andconsumers. 134 These are values that Apple then shares uniformly withits suppliers and their workers (the universe of their dependent

129. Cf. Winfried Brugger, Legal Interpretation, Schools of Jurisprudence, andAnthropology: Some Remarks from a German Point of View, 42 AM. J. COMP. L. 395,410-16 (1994).

130. Cf. Teubner, supra note 40.131. Generally on the jurisdictional limits of multinational regulation, see PETER

MUCHLINSKI, MULTINATIONAL ENTERPRISES AND THE LAW 90-172 (1999).132. See, e.g., We Believe in Accountability-for Our Suppliers and for Ourselves, APPLE,

http://www.apple.com/supplierresponsibility/auditing.html (last visited Apr. 8, 2013)(describing Apple's auditing system for enforcing its "supplier code of conduct").

133. See, e.g., Supplier Responsibility at Apple, APPLE, http://www.apple.com/supplierresponsibility/ (last visited Apr. 8, 2013) (describing Apple's expectations with respect toits suppliers' working conditions and environmental impacts).

134. See, e.g., Environmental Progress, APPLE, http://www.apple.com/environmentiprogress/ (last visited Apr. 8, 2013) (describing Apple's efforts to reduce its environmentalimpacts).

832


populations) through aggressive education and socializationprograms.135 The normative elements are grounded in legitimacy andtouch on those structures that make it possible both to "see" theself-constituting enterprise and to treat it, both inside and outside, assomething legitimately apart from its stakeholders-that is to "feel"it.136 Apple is structured as a system of taxonomy and legitimation thatis grounded in a set of normative assumptions about the purpose ofgovernment and its connection to governance. Apple's constitution, then,produces a self-referencing system whose effects and projectionsoutward can be felt and understood as legitimate. Its internal rules aregrounded in values that reflect behavior norms that are impersonal andprocess based (the rule of law of Apple). 13 7

Apple, Inc. sits at the top of a vast supply chain through which itconceives, designs, manufactures, assembles and distributes a largeproduct line to consumers' world wide.13 8 While Apple may participate

135. See When People Gain New Skills and Knowledge, They Can Improve Their Lives,APPLE, http://www.apple.com/supplierresponsibility/education-and-development.html (lastvisited Apr. 8, 2013) (describing educational resources for workers in Apple's supplychain).

136. See generally APPLE SUPPLIER RESPONSIBILITY: 2012 PROGRESS REPORT, APPLE,(2012), available at http://images.apple.com/supplierresponsibility/pdflApple-SR_2012_ProgressReport.pdf.

137. This is reflected in the construction of its Supplier Code of Conduct-theconstitutional framework of its supply chain relationships:

The Supplier Code of Conduct prohibits all types of involuntary labor,such as slavery, indentured or bonded labor, child labor, and prisonlabor. Our suppliers certify compliance with the local laws applicableto their operations, including any slavery and human trafficking laws,and we verify compliance by conducting rigorous audits of theirfacilities. Beyond auditing, we provide our employees who are directlyresponsible for supply chain management with training on involuntarylabor and human trafficking issues to reinforce our prevention efforts,and we hold them accountable for complying with our standards.

Labor and Human Rights, APPLE, originally available at http://www.apple.com/supplierresponsibility/code-of-conduct/labor-and-human-rights.html, now cached at http://fireballed.org/linked/2012/03/20/monthly-reporting/ (last visited July 12, 2013) (describing Apple'sefforts to prohibit practices that threaten the rights of workers, even when local laws andcustoms permit such practices relating specifically to indentured migrant labor).

138. In its 2012 Annual Report in SEC Form 10K, Apple stated:Substantially all of the Company's hardware products aremanufactured by outsourcing partners that are located primarily inAsia. A significant concentration of this manufacturing is currentlyperformed by a small number of outsourcing partners, often in singlelocations. Certain of these outsourcing partners are the sole-sourcedsuppliers of components and manufacturers for many of the Company'sproducts. Although the Company Works closely with its outsourcingpartners on manufacturing schedules, the Company's operating resultscould be adversely affected if its outsourcing partners were unable tomeet their production commitments. The Company's purchase

833


directly in parts of this chain of production, it has outsourced much ofits production to other autonomous enterprises. Apple had long operatedits own corporate social responsibility governance system through itssupply chain. 13 9 The constitution of this regulatory system was theApple Supplier Code of Conduct. 140 The Code itself is grounded ininternational hard and soft law, much of which has not been transposedinto the domestic law of the United States, much less the domestic lawof host states in which suppliers may be operating.141 Unlike othermultinational corporations with large supply chain operations, Applehas not moved to incorporate within its international governance muchof the governance systems developed by international organs-andspecifically those of the U.N. Global Compact, and the GuidingPrinciples.142 Nor did it embrace third party nonstate (private sector)corporate social responsibility (CSR) related reporting efforts, such as

commitments typically cover its requirements for periods up to 150days.

Annual Report Form 10K 2012, APPLE, INC. at 7, available at http://files.shareholder.com/downloads/AAPL/2589956175xOxS1193125-12-444068/320193/filing.pdf.

139. See APPLE, supra note 136, at 3 ("Our suppliers must live up to Apple's SupplierCode of Conduct as a condition of doing business with us. Drawing on internationallyrecognized standards, our Code lays out Apple's expectations in the areas of labor andhuman rights, worker health and safety, the environmental impact, ethics, andmanagement systems. We insist that our manufacturing partners follow this Code, and wemake sure they do by conducting rigorous audits with the help of independent experts.").A more detailed analysis is the subject of Section II.B., infra.

140. Apple Supplier Code of Conduct, APPLE INC., available at http://www.apple.com/supplierresponsibility/pdflAppleSupplierCode-ofLConduct.pdf. Though the SupplierCode was structured as part of the contractual relations between Apple and its suppliers,it was essentially regulatory in nature. "Apple requires that Suppliers implement thisCode using the management systems described below. Apple may visit (and/or haveexternal monitors visit) Supplier facilities, with or without notice, to assess compliancewith this Code and to audit Supplier's wage, hour, payroll, and other worker records andpractices. Violations of this Code may result in immediate termination as an AppleSupplier and in legal action" Id.

141. This produces a communicative cyclidity at the heart of the embeddedness ofsocietally constituted economic "territories" like that overseen by Apple, and traditionalpublic regulatory space. See, e.g., Teubner, supra note 40, at 634-35.

142. It should be noted though that these are offered usually as frameworks aroundwhich conduct expectation can be drawn, rather than as fully developed regulatorystandards. For example, the FAQs of the Global Compact suggest, "The Global Compact isnot a code of conduct. Rather, it offers a policy framework for organizing and developingcorporate sustainability strategies while offering a platform-based on universalprinciples-to encourage innovative initiatives and partnerships with civil society,governments and other stakeholders." FAQs, Why should a company that has alreadyestablished its own code of conduct participate in the Global Compact?, U.N. GLOBALCOMPACT, at 6, available at http://www.unglobalcompact.org/AboutTheGC/faq.html (lastvisited Sept. 15, 2013). Others, like the OECD Guidelines, are developed as moreregulatory in structure.

834


the systems offered through GRI. 148 Instead, Apple sought to create andmaintain internally developed reporting and behavior standards. Thisunique regulatory code was developed with reference to a number ofinternational public and private standards, 144 but reflected the way inwhich inter-systemic structural coupling both opens self-constitutedsocial systems to other systems, and the way in which thosecommunications are filtered and absorbed to preserve systemicintegrity.

The Code specifies behavior standards and expectations in the areasof labor, human rights, worker health/safety, environmental impact,ethics, and management. 145 Apple reports the results of its monitoringin an annual Apple Supplier Responsibility Progress Report.146 Thesereports suggest the working of an autonomous self-constituted system ofregulatory governance built around Apple and it suppliers, investors,and consumers, who play a central role, supported by nongovernmentorganizations (NGOs) and the media, 147 framed within the economicactivities of Apple's business. But the engine for regulatory movement istriggered by constant communication that in its most transformativeaspects take on the character of Teubner's collisions, 148 within a thecontext of polycentric spatial jurisdictions, as Lindahl describes. 149

143. The Global Reporing Initiative "is a non-profit organization that works towards asustainable global economy by providing sustainability reporting guidance. " See AboutUs, GRI, available at https://www.globalreporting.org/information/about-grilwhat-is-GRI/Pages/default.aspx.

144. The Apple Supplier Code provides that itis modeled on and contains language from the Electronic IndustryCode of Conduct. Recognized standards such as the UniversalDeclaration of Human Rights (UDHR), and standards issued byorganizations such as the International Labour Organization (ILO),Social Accountability International (SAI), and the Ethical TradingInitiative (ETI) were used as references in preparing this Code andmay be useful sources of additional information. A complete list ofreferences is provided at the end of this Code. As an extension of theCode, Apple maintains a series of detailed Standards that clarify ourexpectations for compliance

Apple Suppler Code of Conduct, APPLE INC., at 1, available at http://images.apple.com/supplierresponsibility/pdflAppleSupplierCodeof_.Conduct.pdf (last visited Sept. 15,2013). The Supplier Code of Conduct lists most of the well-known international public andprivate sources of standards of business conduct. Id. at 7-8.

145. See Supplier Responsibility at Apple, supra note 133.146. APPLE, supra note 136. The 2012 Report includes the results of its audits (a private

regulatory function within voluntary code systems). Earlier reports are also available atthe Apple website.

147. Teubner, supra note 118, at 204.148. See discussion, Part III, infra.149. Id.

835


Apple retained sole responsibility for monitoring compliance with itsCode and for remediating breaches and assessing sanctions.1 50 BeforeJanuary 2012 Apple consistently resisted pressure to disclose theenvironmental impact of their manufacturing process or open theirsupplier factories to auditors.15 1 Indeed, Apple's secrecy regarding itsmanufacturing and supplier arrangements has attracted mediaattention in the wake of recent violent incidents at Apple supplierfactories in China and other Asian countries. 152 In response to an earlycriticism by Greenpeace demanding greater transparency regarding theuse of toxic chemicals in Apple products, a letter was published, signedby former Apple CEO Steve Jobs, providing limited details of Apple'sinternal efforts to reduce and remove toxic substances from itsproducts. 153 This was part of the emergence of a more public andcomprehensive CSR effort by Apple, 154 demonstrated by the publicationon its website of a variety of different documents that institutedelements of independently governed transparency systems, whilereassuring Apple shareholders that the corporation could safely andethically monitor its own practices. 155 In subsequent years, Apple hasgradually expanded and changed its online CSR documentation,frequently disclosing additional procedures and imitating additionalexternal standards to respond to different emerging criticism of theenvironmental and employment practices of its industrial suppliers and

150. The Supplier Code of Conduct permits Apple the power to monitor, assess andinspect suppliers for compliance. APPLE, supra note 136. It has the power to terminate itsrelationship with suppliers for violation of their Supplier Code and it compelled suppliersto "have a process for timely correction of any deficiencies identified by an internal orexternal audit, assessment, inspection, investigation, or review." Id. at 7.

151. "We continue to revise our Code based on our experience of auditing our suppliersand through discussions with stakeholder groups." Apple Supplier Responsibility 2010Progress Report, APPLE INC., at 6, available at http://images.apple.com/supplierresponsibility/pdf/Apple SR_2010_ProgressReport.pdf. This suggests the operation of atightly woven self-referencing communication cycle that is permeable but that hasconstituted itself independently of other governance structures with which it might alsocommunicate. See Teubner, supra note 49.

152. See, e.g., Charles Duhigg & David Barboza, In China, Human Costs Are Built intoan IPad, N.Y. TIMES (Jan. 25, 2012), http://www.nytimes.com/2012/01/26/business/i economy-apples-ipad-and-the-human-costs-for-workers-in-china.html?pagewanted=all&_r-0.

153. See Jim Dalrymple, Steve Jobs Outlines Plans for 'a Greener Apple', MACWORLD(May 2, 2007, 12:00 AM), http://www.macworld.com/article/57680/2007/05/greenapple.htm1.

154. See Steve Jobs, A Greener Apple, APPLE (May 2, 2007), http://images.apple.com/hotnews/agreenerapple/docs/A GreenerApple.pdf.

155. See Supplier Responsibility at Apple, supra note 133.

836


manufacturing partners. 15 6 Although this material is now beingsupplanted by third-party oversight, Apple's self-managed corporategovernance reporting is educational about the potential advantages andrisks facing companies that choose a "go-it-alone" approach.1 57

The system worked reasonably well, but Apple, like other largemultinational corporations, is vulnerable to reputation damage amongconsumers and investors in developed states.15 8 For Apple, thatvulnerability was mediated by a regimen of internal transparency(between Apple and its suppliers) but external barriers to information.Before 2012, Apple had resisted any effort to mesh its corporate socialresponsibility regulatory frameworks with those developed by private orpublic actors. One of these is the Fair Labor Association (FLA), whichdescribes itself as "a nonprofit organization dedicated to endingsweatshop conditions in factories worldwide." 5 9 It seeks to meet thisgoal by "bringing together multiple stakeholders, calling for greateraccountability and transparency from manufacturers, factories andothers involved in global supply chains, and creating lasting solutions toexploitative labor practices."160 Key to the work of FLA is thecollaborative development of standards and the enforcement of a systemof monitoring and reporting (transparency) of compliance. "FLAParticipating Companies . .. commit to promoting and complying withinternational labor standards throughout their supply chains[,]" both inthe U.S. and overseas.16 Transparency and reporting are the the keysto the operation of this system. Companies that join the FLA commit toestablishing internal systems for monitoring workplace conditions andmaintaining Code standards, being part of a rigorous system ofIndependent External Monitoring (IEM), and public reporting on theconditions in their supplier factories. To ensure transparency, theresults of the IEM audits are published on the FLA Web site in the form

156. These changes are reflected in Apple's Supplier Responsibility Progress Reports. Alink to historical Reports is provided on the Apple website at http://www.apple.com/supplierresponsibility/reports.html.

157. Another prominent example of the advantages of internal CSR practices isWal-Mart, a company whose market leverage, emerging in part from its CSRdevelopment, has spawned an academic literature of its own. See, e.g., Yu Xiaomin & PunNgai, Walmartization, Corporate Social Responsibility, and the Labor Standards of ToyFactories in South China, in WALMART IN CHINA 54 (Anita Chan ed., 2011).

158. See, e.g., Edmund R. Gray, and John M.T. Balmer, Managing Corporate Image andCorporate Reputation, 31(5) LONG RANGE PLANNING 649-802 (October 1998).

159. FAIR LAB. Ass'N, http://oldsite.fairlabor.org/ (last visited Apr. 8, 2013).160. Id.161. Accreditation, FAIR LAB. AsS'N, http://www.fairlabor.org/accreditation (last visited

Apr. 8, 2013).

837


of tracking charts.162 But it was precisely to avoid the convergence ofregulatory systems, and preserve the autonomy and control of itsregulatory environment, within its supply chain, that probablyaccounted for Apple's proprietary approach to its own self-constitution.Though those structures were deeply enmeshed with other structures ofbusiness conduct, they remained separated from those developed byApple.

Apple, Inc. also did not mesh its corporate social responsibilityregimes with those of its downstream suppliers, irrespective of their sizeor power. One of them is Hon Hai Precision Industry Co., Ltd.163

Operating as Foxconn Technology Group ("Foxconn"), the companydescribes itself as "the most dependable partner for joint-design,joint-development, manufacturing, assembly and after-sales services toglobal Computer, Communication and Consumer-electronics ("3C")leaders. Aided by its legendary green manufacturing execution,uncompromising customer devotion and its award-winning proprietarybusiness model, eCMMS, Hon Hai has been the most trusted name incontract manufacturing services (including CEM, EMS, ODM andCMMS) in the world."l64 By 2012, Foxconn had grown into one of thelargest corporate enterprises on earth. 165 In addition to its work forothers, Han HailFoxconn manufactures a substantial number of Appleproducts for sale and distribution elsewhere. 66

162. What We Do, FAIR LAB. Ass'N, http://oldsite.fairlabor.org/whatwedo.html (lastvisited Apr. 8, 2013).

163. A website profile is available at http://www.foxconn.com/indexEn.html. TheCompany explains that it is "Guided by a belief that the electronics products would be anintegral part of everyday life in every office and in every home, Terry Gou founded HonHai Precision Industry Company Ltd., the anchor company of Hon HailFoxconnTechnology Group in 1974 with US$7,500, a devotion in integrating expertise formechanical and electrical parts and an uncommon concept to provide the lowest 'total cost'solution to increase the affordability of electronics products for all mankind." GroupProfile, HON HAI/FoxCONN, available athttp://www.foxconn.com/GroupProfileEn/GroupProfile.html (last visited Sept. 15, 2013).

164. Group Profile, HON HAI/FOXCONN, supra note 164.165. Foxconn reported that for 2012, it was ranked 43rd among Fortune Global 500 and

156th among Forbes Global 2000. See HON HAI/FOXCONN, Company Milestones, availableat http://www.foxconn.com/GroupProfile-En/CompanyMilestones.html (last visited Sept.15, 2013).

166. "The Taiwan-based company is known as the world's largest electronics supplier,and also counts HP, Microsoft, Sony and other major tech vendors as its clients. Apple,however, makes up 40% to 50% of the company's revenues, according to analysts. Hon Haihelps build Apple's iPhone, iPad, iPod and Mac devices." Michael Kan, Apple Supplier HonHai Earns Record Annual Profit, COMPUTERLAND, Mar. 25, 2013, available athttp://www.computerworld.com/s/article/9237884/Apple-supplierHonHai-earns-record_annualprofit.

838


Like other large companies, Foxconn had also developed its ownautonomous corporate social responsibility philosophy, which it hasinstitutionalized through policy. 167 Like Apple's policies, it was basedlargely on the Electronic Industry Citizenship Coalition (EICC) Code ofConduct, 168 covering labor, social, and environmental issues. 69

Foxconn's CSR policies are made applicable to all aspects of itsoperationso70 and are integrated into its management structure. 171Foxconn has made available CSR Reports for the years 2008-2011 on itswebsite.172 Foxconn's 2008 CSR Report recognized the importance ofCSR issues in the organization of corporate operations and the criticalrole that social actors played in the development of CSR structures andoperations. 173 Foxconn's vision consists of three parts, all of which

167. SER Introduction, HON HAI/FOXCONN, available at http://ser.foxconn.com/IntroductionShow.do.

Codes set out in this CoC policy were derived from three disciplinedsources which are: a) the member obligations of the industrialassociations and the EICC of which Foxconn is a member, and theinternational standard institutes to which Foxconn's business isrelated; b) the laws covering national regions where Foxconn deploysoperations; and c) the internal leadership of Foxconn who determinevoluntary upgrading of performance standards.

SER CoC, HON HAI/FOXCONN, available at http://ser.foxconn.com/GroupCocShow.do (lastvisited Sept. 15, 2013).

168. "Foxconn has been a member of the EICC since 2005. Foxconn established its SERcommittee to manage corporate social and environmental responsibility. Foxconn hasreleased its own SER code of conduct, which is equivalent to the EICC CoC, to promoteSER management." SER Introduction, supra note 167.

169. HON HAI/FOxcONN, SER Policy, SER Statement, available at http://ser.foxconn.com/PolicyShow.do (last visited Sept. 15, 2013).

170. Foxconn states on its website:Foxconn incorporates SER into everyday business to insure health andsafety, employee's rights and benefits, and environmental protectionare fully implemented throughout the company. Foxconn's SERcommittee has set up a management system which complies withinternational standards, national laws, regulations, and customerrequirements for the company's development and sustainableimprovement

SER Policy, SER Statement, supra note 170.171. See SER Organization, HON HAIFOxCONN, available at http://ser.foxconn.com/Org

DescShow.do (last visited Sept. 15, 2013).172. CSR Annual Report, HON HAI/FoXcONN, available at http://ser.foxconn.com/View

AnuReport.do?action=showAnnual (last visited Sept. 15, 2013).173. "In 2007, Foxconn Technology Group established the Foxconn Global SER

Committee (FGSC) to proactively work with stakeholders including customers,nongovernmental organizations (NGOs), and other interested groups on CSER issues. Asa result of the committee's work, we have implemented a wide range of initiatives toimprove our performance across the spectrum of corporate responsibility issues. Ourprogress on these issues is outlined in this report." 2008 Corporate Social andEnvironmental Responsibility Report (2008), FOXCONN TECH. GROUP, at 28, available at

839

840 INDIANA JOURNAL OF GLOBAL LEGAL STUDIES 20:2

together emphasize a commitment to harmony for the profit of thecompany and the benefit of its stakeholders. 174 Despite its substantialCSR programs and reports, there is no indication that either Han Hai orApple took any steps to mesh their respective CSR programs. FromApple's perspective, Han HailFoxconn was contractually obligated toconform its operations to Apple's Supplier Code of Conduct. From HanHailFoxconn's perspective, its CSR program might be harmonized withthat of Apple, but in any case, its workers would be subject to its ownCSR policies, perhaps overlain with those of Apple, the lawinternational law norms overlay the structures of a state's domesticlegal order.175 Together, each served as an irritant to the other in themanagement of the supplier related operations of Han Hain/Foxconn.Both have been in communication (structurally coupled) withtransnational private and public actors from which their respective CSRpolicies were derived. Lastly, each was deeply embedded in networks inwhich both states and private actors sought to monitor corporatecompliance with their respective codes, supported in part by mediasupported by consumers ands investors who derive information about

http://ser.foxconn.com/downloadAttachment/8abe98dc3c5f940a013c84daf0240241/2008+Foxconn+CSER+Annual+Report.pdf (last visited Sept. 15, 2013).

174. The Company has developed a specific philosophy:"Since 1974, Hon HailFoxconn had always been guided by threeFoxconnian visions; Through the most efficient "Total CostAdvantages" to make comfort of electronic products usage anattainable reality for all mankind; Through the proprietary one-stopshopping vertical integrated eCMMS model to revolutionize theconventional inefficient electronics outsourcing model; Through thedevotion to greater social harmony and higher ethical standards toachieve a win-win model for all stakeholders including shareholders,employees, community and management.

About Foxconn, Business Philosophy, FOXCONN, available at http://www.foxconn.com/GroupProfileEn/BusinessPhilosophy.html (last visited Sept. 15, 2013).

175. This relationship produced substantial differences in worker treatment even withinFoxconn's Factory. A 2012 civil society report noted:

Interviews have revealed that workers who make Apple electronicsmake more money than those who work on other brands' products,though this certainly is related to how many overtime hours areworked. In our investigation, we came to learn that wages can be verydifferent even over the same work time since workers make differentbrands of products. For example, in interviewing two workers fromdifferent cell phone departments who were working the same hours,the worker producing cell phones for a small brand-name company wasearning only 2,500 RMB ($397) per month, while the Apple workerearned 3,200 RMB ($508).

Beyond Foxconn: Deplorable Working Conditions Characterize Apple's Entire SupplyChain, CHINA LABOR WATCH, 92-93 (June 27, 2012), available at http://www.chinalaborwatch.org/pdf/2012627-5.pdf.

THE ENFORCEMENT OF HUMAN RIGHTS BY APPLE, INC. 841

corporate compliance from these sources to aid them in theirconsumption and investment decisions.176

All of this would have remained a theoretical curiosity but for aseries of shocks that occurred between 2006 and 2012 and that, byoverwhelming Apple and Foxconn's CSR systems, threatened thefoundations of their societal constitutions. In 2006, reports began tosurface in the international press about terrible working conditions atApple's supplier plants in China. Apple pledged a greater focus onmonitoring and remediation. There was little more until 2010, when thewake of a long string of suicides by workers protesting workingconditions at Han HailFoxconn's Shenzhen factories broughtinternational attention to multiple layers of CSR standards that did notseem to work.177 The negative impact on Apple's image and Foxconn'sreputation was immediate and substantial.178 "Foxconn says it is at itswits' end as to how to tackle the problem, and has even drafted in aBuddhist monk to try to purge its factories of evil spirits."179 Apple'sinitial reaction, after the successful suicides of twelve employees at theFoxconn Shenzhen plant, was more offensive.180 Foxconn's approach was

176. Cf. Larry Cati Backer, Economic Globalization and the Rise of Efficient Systems ofGlobal Private Law Making: Wal-Mart as Global Legislator, 39 CONN. L. REv. 1739 (2007).

177. The Economist reported:Apple was expecting lots of publicity ahead of the international releaseof the iPad, its latest gadget, on May 28th-but not the sort it receivedin Hong Kong this week, which included the ritual burning of picturesof iPhones and calls for a global boycott. The protests were triggered bya series of suicides of employees of Foxconn, a subsidiary of Taiwan'sHon Hai Precision Industry Company, the world's largest "contractmanufacturer."

Light and Death: Suicides at Foxconn, EcONOMIST, May 27, 2010, available at http://www.economist.com/node/16231588.

178. Id.179. Malcolm Moore, What Has Triggered the Suicide Cluster at Foxconn, TELEGRAPH,

May 16, 2010, available at http://blogs.telegraph.co.uk/news/malcolmmoore/100039883/what-has-triggered-the-suicide-cluster-at-foxconn/.

180. See Claudine Beaumont, Foxconn Suicide Rate is Lower Than in the US, SaysApple's Steve Jobs, TELEGRAPH, June 2, 2010, available at http://www.telegraph.co.uk/technology/steve-jobs/77965461Foxconn-suicide-rate-is-lower-than-in-the-US-says-Apples-Steve-Jobs.html.

Jobs said Apple was "on top" of the situation, and that the companytook its corporate and social responsibilities seriously. "We are all overthis," he told delegates at the D8 technology conference in California."We look at everything at these companies, and I can tell you a fewthings that we know: Foxconn is not a sweatshop. It's a factory, butthey have restaurants and movie theatres. They've had some suicidesand attempted suicides. They have 400,000 people there. The rate isunder what the US rate is, but it's still troubling." Jobs said that therehad been a spate of copycat suicides in Palo Alto, his hometown, andthat Apple was working hard to get to the root of problems at Foxconn.

842 INDIANA JOURNAL OF GLOBAL LEGAL STUDIEs 20:2

more measured. "Foxconn Technology Group Chairman Terry Goubowed deeply several times and apologized but also cautioned there wasonly so much his company could do." 181 Foxconn also consulted withmental health professionals. 182 By November 2010, Reuters wasreporting that "the company has pledged to improve work conditions,increase pay, reduce overtime hours and build a string of giant newmanufacturing complexes in inland provinces such as Henan to allowworkers to live closer to home, and tap cheaper labor costs."183 It alsosought to limit suicides by requiring employees to pledge not to killthemselves.184 Foxconn also installed anti-suicide nets.185 But effortswere to no avail. By November 2010, two more workers had successfullycommitted suicide.186 Throughout the year, Foxconn insisted it hadacted within the requirements of law and its own policies. However, acivil society actor, China Watch, reported on the death of anotherworker, suggested serious violations of Chinese law, Foxconn's CSRpolicies, and Apple's Supplier Code.' 87 Some reports traced violations

"We're trying to understand this, we have people over there," he tolddelegates.

Id.181. Chinese Factory Asks For 'No Suicide' Vow, NBC NEWS, May 26, 2010, available at

http://www.nbenews.com/id/37354853/ns/business-world-business/?ns=business-world business#.UeiuM7y9zu4. ("I'm very concerned about this. I can't sleep every night,'said Gou, one of Taiwan's best known businessmen. 'From a scientific point of view, I'mnot confident we can stop every case. But, as a responsible employer, we have to take upthe responsibility of preventing as many as we can."').

182. Id. ("Foxconn was consulting with a large group of mental health professionals whohave been reviewing the company's personnel records.")

183. Foxconn Worker Plunges to Death at China Plant: Report, REUTERS, Nov. 5, 2010,available at http://www.reuters.com/article/2010/11/05/us-china-foxconn-death-idUSTRE6A41M920101105.

184. Chinese Factory Asks For 'No Suicide' Vow, supra note 182 ("Foxconn InternationalHoldings Ltd., one of Apple's Chinese manufacturers, is asking its employees to sign apledge that they will not kill themselves as the company tries to control the damage froma spate of suicides among its work force.").

185. See Eliot Von Buskirk, Foxconn Rallies Workers, Leaves Suicide Nets in Place(Updated), WIRED.COM, Aug. 18, 2010, available at http://www.wired.com/business/2010/08/foxconn-rallies-workers-installs-suicide-nets/.

186. Foxconn Worker Plunges to Death at China Plant: Report, supra note 184.187. "According to Yan Li's family and Foxconn colleagues, because of the rapid

turnaround time for many production orders, Yan Li often worked throughout the night.At one point, according to his family, Yan Li worked for almost 35 hours non-stop, from7AM on May 24, to 5:47 PM on May 25. Even after leaving work on May 25, he stillreceived calls from his superiors, making it impossible for him to rest." Another FoxconnEmployee Died of Fatigue, CHINA LABOR WATCH, June 3, 2010, available at http://www.chinalaborwatch.org/pro/proshow-96.html.


back several years before 2010.18s By the end of 2010, the employeesuicides and their connection with Apple were widely reported in largecirculation Western media in the United States and Europe, andtellingly, in ways that appeared to affect consumer and investorjudgment about Apple. 189 In its 2011 Apple Supplier ResponsibilityReport, 190 Apple reported:

Recognizing that we would need additional expertise tohelp prevent further tragedies, we launched aninternational search for the most knowledgeable suicideprevention specialists-particularly those withexperience in China-and asked them to advise Appleand Foxconn. . . . Apple then commissioned anindependent review by a broader team of suicideprevention experts. This team was asked to conduct adeeper investigation into the suicides, evaluateFoxconn's response, and recommend strategies forsupporting workers' mental health in the future. 191

Apple pledged to "continue to work with Foxconn through theimplementation of these programs, and we plan to take key learningsfrom this engagement to other facilities in our supply base."192 But thesuicides continued, in lesser number through 2013. By the end of 2011,the media attention to Apple and the Foxconn suicides had moved fromthe United Kingdom to important mainstream media in the UnitedStates. Though Apple was able to deflect criticism by an importantmedia critic for verification failures, on the program "This American

188. For prior reports, see We Are Extremely Tired, With Tremendous Pressure, AFollow-Up Investgation of FoxConn, CHINA LABOR WATCH, May 18, 2010, available athttp://www.chinalaborwatch.org/pro/proshow-100.html; Foxconn Tragedy UnderscoresLabor Violations, Lack of Respect, CHINA LABOR WATCH, July 23, 2009, available athttp://www.chinalaborwatch.org/articles/2010_05_18/20090723foxconn.php; Follow Up OnFoxconn, CHINA LABOR WATCH, Aug. 28, 2008, available at http://www.chinalaborwatch.orglarticles/2008 08 28/index.php.

189. See, e.g., Andrew Malone & Richard Jones, Revealed: Inside the Chinese SuicideSweatshop Where Workers Toil in 34-Hour Shifts to Make Your iPod, DAILY MAIL (UK),June 11, 2010, available at http://www.dailymail.co.uk/news/article-1285980/Revealed-Inside-Chinese-suicide-sweatshop-workers-toil-34-hour-shifts-make-iPod.html#ixzz2ZSXsXCmc.

190. Apple Supplier Responsibility Report 2011, APPLE INC., available at http://images.apple.com/supplierresponsibility/pdflAppleSR_2011-ProgressReport.pdf (last visited Aug. 17,2013).

191. Id. at 18.192. Id. at 19.

843


Life,"193 reports published in the New York Times were harder tocounter. 194 Apple was quick to respond, denying the charges andrestating its commitment to the integrity of its regulatory system. 95

Still, the global attention and the monitoring of Apple'sadministration of its supplier responsibility system appeared to requiremore than the usual responses and investigations. The systemicintegrity of Apple's societally constituted governance framework hadreached crisis.

The same month the episode aired, The New York Timesran a front-page investigative series about Apple'soverseas manufacturing, and there were news reportsabout Foxconn workers threatening group suicide in aprotest over their treatment. Faced with all this scrutinyof its manufacturing practices, Apple announced that forthe first time it will allow an outside third party to auditworking conditions at those factories and-for the firsttime ever-it released a list of its suppliers. 96

193. In a recent and highly publicized example, the "weekly public radio program ThisAmerican Life' said on Friday that it was retracting a critical report about Apple's suppliers inChina because the storyteller, Mike Daisey, had embellished details in the narrative." SeeBrian Stelter, This American Life Retracts Episode on Apple's Suppliers in China, N.Y. TIMES,Mar. 16, 2012, available at http://mediadecoder.blogs.nytimes.com /2012/03/16/this-american-life-retracts-episode-on-apples-suppliers-in-chinal ("The program's host, Ira Glass, said in astatement that Mr. Daisey 'lied' to him and to Brian Reed, a producer of the program, aboutdetails related to injured workers Mr. Daisey had described meeting at Foxconn, a factory inChina where Apple products are made"). The original podcast had proven to be popular. SeeCharles Arthur, This American Life Withdraws Damning Apple Episode, THE GUARDIAN, Mar.16, 2012, available at http://www.guardian.co.uk/technology/2012/mar/16/foxconn-ipad-daisey-npr-retraction.

194. See, e.g., Charles Duhigg and David Barboza, In China, Human Costs Are Built Into aniPad, N.Y. TIMES, Jan. 25, 2012, available at http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html?pagewanted=all&_r-0. ("Problems are as varied as onerous work environments andserious-sometimes deadly--safety problems. Employees work excessive overtime, in somecases seven days a week, and live in crowded dorms. Some say they stand so long that theirlegs swell until they can hardly walk. Under-age workers have helped build Apple's products,and the company's suppliers have improperly disposed of hazardous waste and falsified records,according to company reports and advocacy groups that, within China, are often consideredreliable, independent monitors." Id.).

195. Tim Cook Responds To Foxconn Worker Abuse Report: Apple Not Turning 'BlindEye', REUTERS, Jan. 27, 2012, available at http://www.huffingtonpost.com/2012/01/27/tim-cook-foxconn n 1237341.html.

196. This American Life Withdraws Damning Apple Episode, supra note 193.

844


On January 13, 2012, Apple disclosed an almost complete list of itsdirect suppliers for the first time and announced their new membershipin the Fair Labor Association.197 This shift in policy may reflect anumber of realities-the recent loss of a charismatic and famouslywillful executive, a capitulation to skepticism from NGOs and investorsabout the validity of autonomous reporting, or an actual shift of internalcorporate culture. The FLA will, like any third party CSR organization,impose its own requirements and image upon Apple's supply chain,limiting its corporate autonomy. 198 Despite this fact, future FLA reportswill exist alongside Apple's own reporting and policy statements. 9 9

FLA is not the only NGO with which Apple sought to partner after2012. Their website also explains: "We've invited the Institute of Publicand Environmental Affairs (IPE) and other environmental groups towork with us on specialized audits. We're also continuing our work withVerit6, a non-governmental organization (NGO) focused on ensuring fairworking conditions, to develop new strategies for worker-managementcommunication." 200 These enterprises are retained for the samelegitimacy enhancing function as FLA20 1-they assure outsiders,

197. Stanley James & Adam Satariano, Apple Opens Suppliers' Doors to Labor GroupAfter Foxconn Worker Suicides, BLOOMBERG (Jan. 13, 2012, 4:54 PM), http://www.bloomberg.com/news/2012-01-13/apple-opens-suppliers-doors-to-labor-group-after-foxconn-worker-suicides.html. The FLA Press Release noted: "that Apple will join the FLA as aParticipating Company, effective immediately. The FLA will independently assessfacilities in Apple's supply chain and report detailed findings on the FLA website." AppleJoins FLA, FLA, Jan. 14, 2012, available at http://www.fairlabor.org/blog/entry/apple-joins-fla.

198. Apple Joins FLA, supra note 197. ("FLA Participating Companies agree to uphold theFLA Workplace Code of Conduct throughout their supply chains and commit to the FLA'sPrinciples of Fair Labor and Responsible Sourcing.").

199. Thus, Apple continues its practice of producing Supplier Responsibility ProgressReports grounded on its own autonomous Supplier Conduct Code, while the Fair LaborAssociation simultaneously generates reports of its monitoring activities of Apple that arebased on its own third-party standards.

200. 2013 Supplier Responsibility Progress Report, Our Commitment to Transparency,APPLE, INC., available at http://www.apple.com/supplierresponsibility/reports.html (lastvisited Sept. 15, 2013).

201. The importance of the legitimacy-enhancing function of the Apple regulatorysystem is highlighted in the 2013 Apple Supplier Responsibility Progress Report:

To hold ourselves accountable, we reference a variety of externalsources including the IPE pollution database, which highlightssuppliers with environmental citations by local regulatory agencies inChina. This is an additional resource to assess the risk of our suppliersand target our focused environmental audits. In 2012, we completed 55focused environmental audits-a 293 percent increase over 2011. Ofthe 55 sites, 26 were cited in the IPE database.

Apple Supplier Responsibility 2013 Report, APPLE, INC., at 27, available at http://images.apple.com/supplierresponsibility/pdf/AppleSR_2013 Progress Report.pdf (last visitedSept. 15, 2013).

845


principally consumers and investors, of the integrity of Apple's efforts atenforcing its own regulatory structures and thus at strengthening at theoperational level, the cohesion of its control. 202 At the same time, thesecouplings also require Apple to bend its regulatory structures toconform, at least to some extent, with the standards of the third-partycertification entities.

Thus, although Apple was able to use the weight of its CSR policiesto limit the consequences of early scandals, 203 crisis producedsubstantial change that both produced a more permeablesocietally-constituted governance system, but also one that retained itsinternal coherence. However, the lasting effects of seeminglyunrelenting publicity from 2010 forward and the attention by massmedia and third party groups demonstrated that the legitimacy issuesthat faced Apple also would be felt, in almost equal measure, by thirdparty certification partners, who themselves have become subject toscrutiny. 204 At present, the company's previous reliance on autonomousreporting practices may have had the long-term effect of reducing itsability to manage its broader corporate image autonomously of thesystems with which it is intermeshed. But that price has purchasedcoherence and preserved system integrity. Independent reportingpractices can appear to provide a company with an appealing set ofcentral and secondary advantages, but they do not reflect the realities ofsystem operations embedded in a world of intermeshed systems thatmust satisfy the desires of multiple audiences or respond rapidly tooptics problems when something goes wrong.

Thus, crisis, and the possibility of catastrophe (in the form of theattacks on the integrity of Apple's societally-constituted supply chaingovernance structures) moved Apple from a self-contained system withfairly limited structural coupling, to one in which its constituted

202. The 2013 Supplier Responsibility Progress Report explains:We look for environmental issues at many supplier levels, oftenconfronting serious issues deep within our supply chain. But we knowthat risks are not the same for all suppliers. So we target high-risksuppliers for an additional layer of scrutiny with our focusedenvironmental audits, and we work with them to lessen their impacts.To ensure our standards and our approach reflect materialenvironmental issues, we work with independent organizations suchas the Natural Resources Defense Council (NRDC), the EnvironmentalProtection Agency (EPA), and the Institute of Public andEnvironmental Affairs (IPE).

Id. at 27.203. Larry CatA Backer, Apple, Inc, the FLA and the Governance of Supplier Labor

Standards Beyond the State, Law at the End of the Day, Jan. 17, 2012, available athttp://lcbackerblog.blogspot.com/2012/01/apple-inc-fla-and-governance-of.html.

204. Steven Greenhouse, Critics Question Record of Monitor Selected by Apple, N.Y.TIMEs, Feb. 14, 2012, at B1.

846


structures are now intermeshed with those of its suppliers (Foxconn'sCSR policy structures), with externally constituted standard-makingand monitoring organisms, while remaining connected with theregulatory systems of the states in which they operate and theinternational standard setting bodies form which they continue to drawtheir own norms. Apple's regulatory structures are now more porousand flexible within a polycentric context in which its governance is oneof several simultaneously operative layers all in dynamic flux. We movehere from two-dimensional to three-dimensional simultaneous cyclidity.

B. Systemic Stress and Resilience: A First Level Analysis

Apple's response to crisis and the resilience of its regulatory systemexhibit all of the elements of self-constitution, and of the intermeshingwhose presence is best exposed under conditions of catastrophic stress.Apple's constitutional system is both self-referencing and autonomyenhancing. It sits in a space other than that occupied by states or othergovernance organizations. Yet, it is also wholly enmeshed in systems ofcommunication (structurally coupled) of other governance organs whereits "territory" overlaps. The effects of that communication on Apple'sinternal rulemaking, and the effect of these inward projects on outwardsolidification of legitimacy of the Apple structure were well illustratedin the Foxconn crisis.

The result is interesting in several respects. First, it suggests thegrowing markets for CSR governance. Second, it also illustrates theincreasingly important role of NGOs in the development of standardsand their monitoring and enforcement-functions once thought centralto the role of states. Third, it evidences the economics of CSRenforcement, at least in some areas. Apple became an accreditedenterprise within the FLA family because it made economic sense to doso-that indicates both the lower costs of FLA overseeing complianceand the benefits of belonging to a wider group of enterprises and NGOsthat have developed and are adhering to common social norm (soft lawvoluntary) standards.

The first decade of the twenty-first century has seen a dramaticgrowth in the depth and sophistication of governance systems beyondlaw that focus on the regulation of the labor policy of downstreamenterprises in multinational supply chains. 205 One of the markers of

205. "Such [employer generated] instruments establish private contract-likemechanisms for monitoring and enforcing compliance with international labor standards,obligating multinational corporations and sometimes also other private businesses withinthe multinational's supply chain." Marley S. Weiss, International Labor and EmploymentLaw: From Periphery to Core, 25 ABA J. LAB. & EMP. L. 487, 500-01 (2010). "Generally,

847


that growth is the rise of enterprises, the objects of which are to bothdevelop normative governance frameworks and provide a space formonitoring compliance. 206 Many of these monitoring mechanisms areproduct or process certification programs managed by civil societyelements.207

Related to product certification programs, these standardsevaluators have become powerful mechanisms to enforce the privateordering governance derived from the adoption of voluntary codes ofbehavior by multinational enterprises. "In the not-for-profit field bothaccreditation and certification have been undertaken by self-regulatoryorganizations, which have promulgated standards and developedcertification or accreditation mechanisms to evaluate compliance byother organizations with the standards." 208 Beyond product certification,process certification has provided NGOs with a new and moreinstitutionalized role in the application of governance standards amongcommunities of enterprises that have adopted them. 209

Organizations like FLA institutionalize transparency mechanismsso that markets for information and disclosure can arise-producing

reference to supply chains in CSR reports is on the increase, although it was found thatapproximately half of the major multinationals omit reference to their suppliers." GuyMundlak & Issi Rosen-Zvi, Signaling Virtue? A Comparison Of Corporate Codes In TheFields Of Labor And Environment, 12 THEORETICAL INQUIRIES L. 603, 626 n.46 (2011).Supply chain management in the context of corporate social responsibility generally, andthe human rights effects of business activity specifically, has become the subject ofimportant soft law regulatory structures. See, e.g., OECD Guidelines, supra note 97;Special Representative of the Secretary-General on the Issue of Human Rights &Transnational Corps. & Other Bus. Enters., Guiding Principles on Business and HumanRights: Implementing the United Nations 'Protect, Respect and Remedy" Framework,Human Rights Council, U.N. Doc. A/HRC/17/31 (Mar. 21, 2011) (by John Ruggie),available at http://www.business-humanrights.org/medialdocuments/ruggie/ruggie-guiding-principles-21-mar-2011.pdf.

206. See, e.g., Errol E. Meidinger, The New Environmental Law: Forest Certification, 10BUFFALO ENVTL. L.J. 213 (2001). This has been criticized as permitting what is now called"greenwashing"-the use of third party certification organizations to cover standardsviolations by large enterprises. See, e.g., Jacob Vos, Note, Actions Speak Louder thanWords: Greenwashing in Corporate America, 23 NOTRE DAME J.L. ETHICS & PUB. POL'Y673 (2009).

207. See, e.g., Fabrice Etil6 & Sabrina Teyssier, Signaling Corporate SocialResponsibility: Third-Party Certification vs. Brands, ALISS Working Paper 2012-06 (Sept.2012). See also Backer, supra note 203.

208. CATHERINE SHEA & SANDRA SITAR, INT'L CTR. FOR NOT-FOR-PROFIT LAw, NGOACCREDITATION AND CERTIFICATION: THE WAY FORWARD? AN EVALUATION OF THEDEVELOPMENT COMMUNITY'S EXPERIENCE 7 (2005), available at http://pdf.usaid.gov/pdLdocsJPNADB766.pdf. The standards are frequently developed through a participatory processin which many stakeholders are consulted.

209. See generally Janet Dine, Democratization: The Contribution of Fair Trade andEthical Trading Movements, 15 IND. J. GLOBAL LEGAL STUD. 177 (2008).

848


similar disclosure products for consumption by investors and consumersto guide their purchase and investment decisions. 210 This systemprovides a viable approach to transnational governance without theneed for states. Effectively, FLA contributes to making soft lawfunctionally hard while it retains its character, within public lawframeworks, as soft.211 While accredited companies lose autonomy in theconstruction and application of voluntary codes throughout their supplychain, they gain a certain legitimacy by adhering to the collaborativestandard-setting and transparency-facilitating outside institutions.Accredited companies can outsource enforcement while retaining asubstantial stake in the development of both the standards to be appliedand the monitoring systems applied. The dynamics of thesedevelopments is nicely illustrated with the ongoing difficulties at theFoxconn plants in China, a facility operated by multinational interestfor the purpose of supplying parts and other goods to multinationalenterprises in the production of a host of consumer products for saleworldwide.212

Most important, though, the crisis and its management suggests theways in which institutions may structurally couple in a variety of waysto preserve a space for regulatory autonomy especially potent in apolycentric governance framework. The consequence is that thoughthird-party standard setting and their function of monitoring and

210. See Accreditation, FAIR LAB. Ass'N, http://www.fairlabor.org/accreditation (lastvisited Apr. 8, 2013). The Fair Wear Foundation nicely illustrates this relationship:

Companies that produce and distribute products of which the mainmanufacturing process is sewing can join FWF and, depending on thedirect influence they have with garment factories, become an FWFaffiliate or FWF ambassador. Both affiliates and ambassadors of FWFwork towards improving the labour conditions in factories andworkshops where the 'cut-make-trim' stage takes place, all over theworld. The basis of the collaboration between FWF and a member isthe Code of Labour Practices. Eight labour standards form the core ofthe Code of Labour Practices. Members of FWF must comply with thisCode of Labour Practices.

About, FAIR WEAR FOUNDATION, available at http://www.fairwear.org/22/about/. The FWF Codeof Labour Practices is based on international normative standards, none of which mind statesas a matter of international or domestic law-the Universal Declaration of Human Rights andthe LO Convention. See FWF Code of Labour Practices, at 1, available at http://www.fairwear.org/ul/cms/fck-uploaded/documents/companies/FWFdocs/fwfcodeoflabour practices.pdf (lastvisited Sept. 15, 2013).

211. See generally Larry Cati Backer, From Moral Obligation to International Law:Disclosure Systems, Markets and the Regulation of Multinational Corporations, 39 GEO. J.INT'L L. 101 (2008).

212. See Larry CatA Backer, Corporate Governance and the Social License to Operate:Foxconn and the Limits of Legal Formalism in Corporate Governance, LAw AT THE END OFTHE DAY (June 8, 2010), http://lcbackerblog.blogspot.com/2010/06/corporate-governance-and-social-license.html. One of the consumers of Foxconn products is Apple, Inc.

849


process certification is potent, the ability of organizations like FIA tobring other autonomous governance actors within their orbit remainlimited. The relationship between Apple and FLA strengthened theirrespective governance autonomy structures but did not cause one to beabsorbed into the other. Even as an FLA accredited company, Apple stillretains control over its supplier governance systems in the areas beyondlabor standards-significantly these include the areas of environmentalstandards, ethics, management systems, and worker education rules.The result is the continued elaboration of hybrid governance systems,even in the purely private sphere. And make no mistake, Apple haselaborated a complex and deep system of governance. Its engine islegislation in the form of contract and practice-the supplier code ofconduct. 213

It is regulatory in function, providing Apple with a substantialauthority not merely to monitor compliance, but also to train andsocialize the members of suppliers. Apple's enforcement is dependent onits ability to report its activities to its principalconstituents-shareholders and consumers. The conduct standards arethus directed toward investor and consumer taste and not necessarilydependent on the needs or desires of the objects of the codes. But theywere also directed inward through the supply chain and downward fromFoxconn to its own suppliers. One of the most interesting aspects of thecommunication among Apple and Foxconn was evidenced by thereplication of Apple's vertically arranged governance structures byFoxconn with respect to its own suppliers. In its 2011 CSR Report,Foxconn described its own "Supplier SER management" in terms thatmirrored those applicable to it through the Apple Supplier Code ofConduct.214 This included a zero tolerance policy covering six identifiedareas, 215 the requirement that all suppliers enter into environmentalprotection contracts with Foxconn, 216 conform their conduct to Foxconn's

213. Apple Supplier code of conduct, page 1 provides:Apple requires that Suppliers implement this Code using themanagement systems described below. Apple may visit (andlor haveexternal monitors visit) Supplier facilities, with or without notice, toassess compliance with this Code and to audit Supplier's wage, hour,payroll, and other worker records and practices. Violations of this Codemay result in immediate termination as an Apple Supplier and in legalaction.

Apple Supplier Code of Conduct, supra note 140, at 1.214. 2011 CSER Annual Report, FOXCONN, at 42-46, available at http://ser.foxconn.com/

SelectLanguageAction.do?language=1&jump=/cser/AnnualReport.jsp (last visited Sept.15, 2013).

215. Id. at Section 6.1 (child labor, prison labor, hazardous waste, working conditions,falsification of information, and employee retaliation).

216. Id. at Section 6.2.

850


conflict minerals management policies, 217 and participate in Foxconn'sprograms of combatting global warming. 218 While these existedautonomously of those of Apple (and applied to all of Foxconn'soperations, including those for enterprises other than Apple) throughoutits own global supply chain, it tended to be operated in constantdialogue with Apple's own system and those of other multinationalswith which Foxconn engaged in business. That both Apple and Foxconnoperated regulatory regimes on Foxconn's workers (at least thoseassigned to Foxconn's Apple operations) provides a good illustration ofpolycentric governance at the heart of globalization governance. 219 Andit might follow that Foxconn's own CSR regulatory structures mightexhibit characteristics similar to those of Apple, though exhibitedindependently of Apple's.

The content of Apple's CSR documentation, coupled with theresponses and criticism it has garnered since its publication, provides afruitful means of examining the effectiveness of autonomous,self-managed CSR practices. Apple compliance materials, primarily the"Supplier Responsibility Progress Reports," for the years 2006-2012,were retrieved from the Apple website. 220 It should be no surprise thatpublicly available reporting material provided by Apple is primarilyaimed at assuring investors and public critics that the company is doingeverything it can to live up to the aspirations of its broadest policystatements. Apple presents a patchwork of interconnected, disjointed,and occasionally out-of-date HTML and PDF documents, making thetask of locating specific information about the company's currentpolicies in CSR practices a difficult task. For example, each Appleproduct's energy efficiency is recorded in a separate PDF file, makingdirect comparisons difficult. The layout of the website is divided

217. Id. at Section 6.3. This program was, in turn, coupled with emerging internationalstandards on conflict minerals management that reflected both developments in publicinternational law, in the norms produced by public international organizations, and in thestandards developed by the private certification and standard-setting organizations withwhich Foxconn engaged. But that engagement did not diminish the coherence of Foxconn'sown self-constituted CSER regulatory framework. The resulting governance universeevidences its three dimensional spatial qualities. See discussion, infra, Section III.

218. Id. at Section 6.4.219. This is what Gunther Teubner references as polycentric globalization. See Gunther

Teubner, The Corporate Codes of Multinationals: Company Constitutions BeyondCorporate Governance and Co-Determination, in CONFLICT OF LAWS AND LAWS OFCONFLICT IN EUROPE AND BEYOND: PATTERNS OF SUPRANATIONAL AND TRANSNATIONAL

JURIDIFICATION (Rainer Nickel, ed., 2009).220. Apple Supplier Responsibility Progress Report, APPLE.COM, http://www.apple.com/

supplierresponsibility/reports.html (last visited Apr. 8, 2013) (listing all reports from 2007to 2013). The 2006 Progress Report is no longer available publicly. Reports may beobtained in the Historical Reports section.

851


between environmental concerns in one division and supplier activitiesin the other, absent any unified organization. This leads to the presenceof outdated and sometimes conflicting information. For example, theEnvironmental FAQs page directs users interested in Apple's GlobalReporting Initiative (GRI) compliance on unspecified environmentalindexes to the 2009 Facilities Report.221 An "Environmental Update"reached from the main environmental reporting page is actually a letterto consumers from Steve Jobs, dating back to 2008.222 A concernedmember of the public may easily leave the site with old information orwith the belief that the information is unavailable when it may in factbe hidden in a PDF file that has been cut off from the site architectureby a long-past update. The chaos of Apple's CSR aesthetics is all themore jarring given the company's reputation for clean and effective,easy-to-navigate design.

The messiness of Apple's communication makes sense, however,when it is understood not as an attempt to comply with externallydeveloped regulatory norms, but as an attempt by the company to avoidbeing tethered to an externally determined set of information practices.Apple exemplifies the corporate actor for whom transparency hashistorically held little appeal, particularly the norm exposure thatwould come from third party frameworks. Enjoying a secure marketposition and high market power control over its manufacturing supplychain, disclosure of factory conditions offers little benefit to the companyin the absence of public outcry or criticism. In response to early concernsabout environmental effects, Apple captured a valuable opportunity-itscaptive consumer audience and high level of trust allowed self-reportingto reflect an intrinsically reliable extension of the Apple brand,effectively annulling its need to enter the market of reportingstandards. For a period, Apple's own statements effectively competedwith others applied to the company by critical media and NGO parties.These tended to mitigate negative social perceptions whilesimultaneously buttressing Apple's legitimacy as a CSR practitioneramong consumers made newly aware of the environmental and laborcosts of its business.223 Apple was able to "double down" on itspreexisting corporate image by presenting its own information, while

221. Apple and the Environment: Frequently Asked Questions, APPLE (Feb. 28, 2012),http://web.archive.org/web/20110224013423/http://www.apple.comlenvironment/faq.html(archival copy of the current environmental frequently asked questions page).

222. Apple 2008 Environmental Update, APPLE, http://www.apple.com/environment/reports/update.html (last visited Apr. 8, 2013).

223. It is, for example, notable that Apple has been careful to include its supplierresponsibility and environmental reporting in its "Investor News" section. See InvestorNews, APPLE, INC., available at http://investor.apple.com/ (last visited Sept. 15, 2013).

852


gaining time to work behind the scenes to discipline and manage theconsequences of unpopular supplier practices. Internationalcorporations are frequently able to maintain effective private CSRstandards for an extended period and can use them to leverage andenforce changes in industrial practice, effectively competing withwatchdogs and third party monitors to define the scope of legitimatecorporate action, while leveraging them to other market effects. 224

Companies occupying this state of dominance can also dictate thepractices of their suppliers and competitors by altering the scope ofacceptable corporate behavior. 225 At a minimum, companies facingcriticism can use the competing policies of their CSR governance toblunt and control the scope of public criticism. 226 This is a process thatmay continue as Apple gradually shifts to reporting governed by or incompliance with third party practices.

Thus, in attempting to develop its disclosure practices as criticismoccurred, Apple produced a CSR regime that could not truly satisfy itscritics. This contributed to the crisis of legitimacy and the viability of itssocietally constituted governance structures. The way in which Applecommunicated its enforcement of its own regulatory system provides awindow on the nature of the failures leading to crisis. 227 At multipleplaces within the design and text in its reporting documents, thestruggle between relying upon the formulae of other CSR entities andconstructing a special, Apple-specific transparency philosophy isapparent. The authors of Apple's reporting policies and products areclearly aware of independent standards, and take pains to both

224. Again, Walmart is a pioneering example of this practice in both good and badsupplier practices. See, e.g., Xiaomin & Ngai, supra note 157, at 63-70.

225. See Larry Cati Backer, On the Autonomous Regulatory Authority of Corporationsin Global Private Markets: Governance Between Corporation and State, LAW AT THE ENDOF THE DAY (Mar. 28, 2011, 9:13 PM), http://lcbackerblog.blogspot.com/2011/03/onthe-autonomous-regulatory-authority.html.

226. See Larry CatA Backer, Corporate Social Responsibility and Voluntary Codes: Apple, ItsStakeholders and Its Chinese Laborers, LAW AT THE END OF THE DAY (June 16, 2006, 5:50 AM),http://1cbackerblog.blogspot.com/2006/06/corporate-social-responsibility-and.html.

227. Communication in this case suggests a multi-dimensional loose structural couplingbetween institution and stakeholder that combines to create a dynamic environment in whichlegitimacy, loyalty, and interactions with the system among its shareholders is of centralconcern. "A loosely coupled system is a good vehicle for registering objectives outside of itself,but is itself an elusive object to understand. Thus, in a loosely coupled system, what is mostlikely to be socially constructed is the system itself, not the world it faces." J. Douglas Orton &Karl E. Weick, Loosely Coupled Systems: A Reconceptualization, 15(2) THE ACADEMY OFMANAGEMENT REVIEW 203-23, 218 (1990), available at http://xa.yimg.comlkq/groups/19459303/1351724291/name/OrtonWeickl990LooselyCoupledSystems.pdf ('Loose coupling, for example,is the product of many years of effort by organization theorists to combine the contradictoryconcepts of connection and autonomy." Id. at 216).

853


acknowledge their existence and evade their use. For example, theclearest mention of GRI compliance, the only listing of indices whichApple claims to report, is found under the environmental website. 228

This webpage includes links under headings such as "Governance" and"Supplier Responsibility," but these links lead to other front pages onthe Apple home page without the actual GRI-compliant information.The 2011 Facilities Report includes the statement that GRI guidelines"were considered during the preparation of this report," and specificindices are referenced as "applicable" in footnotes at the end of differentsections.229 In the partitioned area of Apple's public site devoted tosupplier practices, the most heavily promoted transparency document isthe Supplier Code of Conduct, which acts as an overarching statementof policy, guiding the content of other representations made by thecompany regarding its stakeholder impacts.230 The Code of Conductemphasizes that it "is modeled on and contains language from" anumber of international and private standards. 231 At the same time,although there are many commonalities of language, no singledocument or set of norms is used as the basis for Apple's policies, a factwhich becomes even more confusing when the annual progress report isconsulted. Each year's report applies similar aspirational language, butappears to hold the company to a different standard of disclosure. Thisissue is partially addressed in the Supplier Responsibility 2012 ProgressReport, in which the detail and number of supplier site audits is greatlyincreased. 232 The report represented an implicit concession by Applethat previous reports were inadequate, while ensuring that the companywould continue to manage the perception that future revelations aboutits supplier chain were viewed in a context influenced by Apple'sbehavioral ethos.

As with other companies that approach participation withlarge-scale transparency efforts in this way, third party entities haveinvestigated Apple's business practices, in particular employment andenvironmental practices at locations along the manufacturer's supplychain. Representative of these investigative efforts is the reportpublished in 2007 by the Stichting Onderzoek MultinationaleOndernemingen (SOMO), a nonprofit organization whose activities are

228. Apple and the Environment: GRI Index, APPLE.COM, http://www.apple.comlenvironment/reports/gri-index.html (last visited Apr. 8, 2013).

229. See Apple, Inc. 2011 Facilities Report: Environmental Update, APPLE.COM, at 1, availableat https//www.apple.com/environment/reports/docs/AppleFacilities Report_20 1.pdf.

230. Apple Supplier Code of Conduct, supra note 140.231. Id. at 1, 7-8.232. Apple Supplier Responsibility 2012 Progress Report, APPLE (Jan. 2012), http://

images.apple.com/supplierresponsibility/pdflAppleSR2012 ProgressReport.pdf.

854


funded in part by the Dutch government and which organizes andinteracts with other environmental and labor-oriented corporatetransparency organizations. 233 It "investigates multinationalcorporations and the consequences of their activities for people and theenvironment around the world."234 By aggregating Apple's CSR policystatements and other public disclosures, then comparing them withemployee interviews at several supplier factories around the globe,SOMO attempted to see how well the company was living up to theaspirational language of its policy claims. 235 As might be expected, awide gap existed between Apple's stated policy and its on-the-groundpractices. 236 This and other reports by private and media entities havepublicized the obscurity and potential for abuse latent in Apple'sself-regulated supply system. The environmental NGO "As You Sow"has been one major source of internal pressure for the corporation,having introduced multiple shareholder proposals designed to graduallymove the corporation toward greater public disclosure on itsenvironmental impacts, including proposals for Apple to join moreconventional reporting structures.237 Although Apple has occasionallyacquiesced to limited additional disclosure, it has only recently agreedto broader cooperation with third party entities. Beyond the statedpurpose of maintaining its privacy and the advantage of a secret supplysystem, Apple has clear incentives to avoid structural entanglement;investment companies have used UNGC standards as a basis forexcluding companies with controversial business practices from theirportfolios.238

But these outside monitors also encounter difficulties and arethemselves sometimes subject to the disciplines of transparency.Control of data by the data generator, in this case Apple, makes it farmore difficult to verify and contest the information produced. Thetransaction costs of data verification can be substantial and the process

233. See Ctr. for Research on Multinational Corps., About SOMO, SOMO, http://somo.ni/about-somo (last visited Apr. 8, 2013).

234. Id.235. MICHIEL VAN DIJK & IRENE SCHIPPER, APPLE CSR COMPANY PROFILE 4 (2007),

available at http://somo.nl/publications-en/Publication 1963.236. Id. at 44.237. Climate: Corporate Reporting and Emission Reduction in Computer/IT Sector: Apple,

As You Sow, http://asyousow.org/sustainability/climate%20IT%2Oapple.shtml (last visited Apr.8, 2013).

238. See, e.g., Desiree Kopppes, Delta Lloyd Excludes 38 Companies for Violating GlobalCompact Principles, GLOBAL COMPACT CRITICS (Feb. 2, 2012), http://globalcompactcritics.blogspot.com/2012/02/delta-1loyd-excludes-38-companies-for.html.

855


difficult.239 In a recent and highly publicized example, the "weeklypublic radio program 'This American Life' said on Friday that it wasretracting a critical report about Apple's suppliers in China because thestoryteller, Mike Daisey, had embellished details in the narrative."240 Acorrespondent for another radio program discovered the errors. 241 Thiscorrespondent tracked down the interpreter Daisey hired who disputedwhat Daisey said on his show.242 Apple had been reported as havingattempted unsuccessfully to rebut the allegations for some timebefore.243 Ironically this may as well suggest that, like markets fortransparency structures, third party and civil society monitors may alsobe disciplined by competitive forces within the constraints of their ownethics universe. It also suggests the problems of monitoringtransparency in the context of the purpose for which it isused-reporting, remediation, correction, or participation in decisionsabout the continued engagement in certain activity. In this case, themisrepresentations were actually of events that had occurred, and hadbeen reported, but not in the context in which they were then used.244

239. See generally Larry Catd Backer, Economic Globalization and the Rise of EfficientSystems of Global Private Law Making: Wal-Mart as Global Legislator, 39 CONN. L. REV.1739 (2007) (analyzing the cost of monitoring as an aspect of private legislation throughglobal supply-chain management contracts).

240. Stelter, supra note 193.241. Id. From the This American Life Retraction, a description of the magnitude and

scope of the errors:Some of the falsehoods found in Daisey's monologue are small ones:the number of factories Daisey visited in China, for instance, and thenumber of workers he spoke with. Others are large. In his monologuehe claims to have met a group of workers who were poisoned on aniPhone assembly line by a chemical called n-hexane. Apple's audits ofits suppliers show that an incident like this occurred in a factory inChina, but the factory wasn't located in Shenzhen, where Daiseyvisited.

Press Release, This Am. Life, This American Life Retracts Story: Says It Can't Vouch forthe Truth of Mike Daisey's Monologue about Apple in China (Mar. 16, 2012, 1:00 PM),available at http://www.chicagopublicmedia.org/sites/default/files/Retraction%2OPress%20Release%20Final.pdf.

242. Ira Glass, Retracting "Mr. Daisey and the Apple Factory," THIS AM. LIFE (Mar. 16,2012), http://www.thisamericanlife.org/blog/2012/03/retracting-mr-daisey-and-the-apple-factory.

243. Paul Farhi, 'This American Life' Cites 'Fabrications' in Documentary on AppleSuppliers, WASH. POST (Mar. 16, 2012), http://articles.washingtonpost.com/2012-03-16/lifestyle/35450242 1_mike-daisey-gorgeous-devices-factory-accident.

244. The news story about the retraction also noted:In a report for "Marketplace" on Friday, Mr. Schmitz acknowledgedthat other people actually had witnessed harsh conditions at thefactories that supplied Apple. "What makes this a little complicated,"he said, "is that the things Daisey lied about are things that haveactually happened in China: Workers making Apple products havebeen poisoned by hexane. Apple's own audits show the company has

856


As a consequence, the reporting might have been misleading, but thepurpose-to deploy information to pressure a reporting entity toabandon a particular practice or work place rule in favor of others-wasbased on something approaching verifiable facts.

Yet, communication with shareholders and consumers, both directand indirect, remained essential. In that respect, global media sourcesplay a critical role. Recall the critical role of the press in reporting thesuicides, Apple's reactions, and the studies by various NGO's and infacilitating the transmission of witness testimonials to consumers andinvestors in Western states that would have provided the impetustoward Apple's regulatory joint venture with FLA.245 NGOs play acritical role as authenticators, monitors, and standards stakeholders.Their participation ensures a certain legitimacy in the system and alsomakes it harder for enterprises to use the system solely for self-servingpurposes. Together, these participants have built a system that isinternally consistent and coherent, but is fundamentally fluid anddynamic. The system draws on, but does not depend on, the action ofstates and other international public bodies. Like others systems, it isimperfect, and subject to manipulation and abuse, but at least to someappreciable extent, it also appears to work without the directintervention of states. The societal constitution of Apple, Inc. is heavilyembedded within networks of regulatory systems developed andoperated by national and international public and private bodies, whosestandards may be invoked by stakeholders with allegiances acrossmultiple regulatory planes by actors that mediate systemiccommunication and enhance the effects of that communication in termsof facilitating information flows. Apple's interactions with itsstakeholders trigger both legitimacy issues with respect to its ability toenforce its own regulatory system, and integrity issues as stakeholdersseek to apply multiple standards simultaneously to events that triggerregulatory response. Something as simple (though horrific and tragic ona personal level) as employee dissatisfaction marked by extremeaction-suicide-may trigger complex structural coupling amonginterpenetrating systems whose actions serve as both evolutiveresponses to this stimulus and actions to preserve the integrity ofsocietally constituted organisms. Apple continues to thrive as anautonomous regulatory, even as it operates within a number of stateswith distinct legal systems and among public and private international

caught underage workers at a handful of its suppliers. These thingsare rare, but together, they form an easy-to-understand narrativeabout Apple."

Stelter, supra note 140.245. See generally Backer, supra note 203.

857


organizations with applicable regulatory frameworks of their own. Thelast section takes up the theoretical implications of this reality.

III. STABLE CONSTITUTIONS IN DYNAMIC OSCILLATION AND COLLISIONCOURSE

The story of Apple, Inc.'s regulatory relationships with itsdownstream Chinese supply chain illustrates a dynamic element tosocietal constitutionalism. The discussion of constitutionalism, ofcourse, freezes and crops a moment in time and an organization ororganizational type, but organizations exist both in time and amongother organizations-organizations both similar and dissimilar withinthe constitutionalizing logic of globalization. Moreover, organizations,whether states or nonstate actors, exist not merely in time, but also inconstant collision with each other. What in Section I appeared as littlemore than the theoretical expansion of the family of self-constitutedactors becomes, in Section II a functionally dynamic polycentric massthat not just communicates but collides, conflicts, and affects theexternal extent of governance spaces and the internal organization ofthose spaces. Constitutionalism, then, requires a consideration ofautonomy, form, and function within a crowded field of distinct actorsthat must develop a method of both receiving action from outside theself-constituted society and internalizing this communicationnaturalized through the framework of the rules by which a society hasconstituted itself.246 It requires a language for that purpose.247 IS itpossible to extract premises of the dynamic element of societalconstitutions?

Hans Lindahl has mapped out a topology of legal orders in a globalsetting with constitutionalist implications. 248 That topology posits a setof interlocking propositions that describe the basic spatial structure ofgovernance orders. The first proposition is that legal orders createnormative points that permit borders, differentiating and integrating a

246. This, of course, is the essence of the problem facing Apple in its dynamicconfrontation with a crisis of legitimacy and systemic coherence within a polycentricgovernance universe. See discussion, Section II.A., supra.

247. Poul F. Kjaer, Transnational Normative Orders: The Constitutionalism of Intra-and Trans-Normative Law, 20 IND. J. GLOBAL LEGAL STuD. 777 (2013) ("[A] broadercategory of law, which deals with transfers and adaptation between normative orders assuch, has emerged. This type of law can also be understood as a specific form of trans-normative law insofar as it is characterized by a relative structural supremacy of cognitiverather than normative structures of expectations due to its primary orientation towardsthe establishment of increased mutual adaptability between normative orders.").

248. See Lindahl, supra note 59.

858


governance space into a unity within the space (ought places) 24 9 that isthe point of regulation. The second proposition is that this special unitycreates a border, much like the physical borders of the territorialfrontiers of states.250 The third proposition is that this closing offrontiers permits ownership of the space enclosed, and thus its controlas against outsiders.251 The fourth proposition is that, so allocated, thenotion of space becomes ambiguous-a space is always both inside andoutside depending on the perspective of the observer. 252 The fifthproposition is that these ought places themselves may produce strangeplaces that fall outside a collective's own space.253 The sixth propositionis that the inside-outside distinction is irreducible to each other, "astrange place need not be foreign; a foreign place need not bestrange."254 The seventh proposition, that distinctions among spaces arefundamentally contingent, is made manifest by space and rule (spatialand legal orders).255 The result, illustrated through the development ofmodern cyberlaw, 256 suggests both the emergence of polycentric ordersand their intermeshing along multi-spatial and legal ordering lines.

Lindahl's analysis adds a third dimension to the conventionaltwo-dimensional conceptualization of governance space in the wake ofglobalization. 25 7 Poul Kjaer speaks of a "common feature of public andprivate organizations operating in the transnational space is thatthey-despite numerous predictions of the opposite-internally tend tohave a vertical nucleus in the form of a hierarchical organizationalstructure of the sort originally described by Weber."258 As aconsequence, it is common to understand a crowded two-dimensionalspace-organized by territory-within which a host of functionallydifferentiated self-reflexive and constituted governance units canoperate simultaneously.

249. "Ought places" are understood as "places where behavior ought or ought not to takeplace-that lends a spatial form to the common interest of a community." Hans Lindahl,A-Legality: Postnationalism and the Question of Legal Boundaries, in GLOBAL DEMOCRACYAND EXCLUSION 117, 123 (Ronald Tinnevelt & Helder De Schutter, eds., 2010).

250. See Lindahl, supra note 59.251. Id.252. Id.253. Id.254. Id. at 722.255. Id.256. Id.257. See generally Poul F. Kjaer, The Metamorphosis of the Functional Synthesis: A

Continental European Perspective on Governance, Law, and the Political in the TransnationalSpace, 2010 Wis. L. REv. 489.

258. Id. at 505.

859


The consequence is that a multitude of different forms ofnormative orders can be observed in the transnationalspace. A highly complex disorder of normative orderexists in the sense that a whole range of structuresproducing their own forms of normativity operates andcollides like billiard balls in the transnational space.Especially small and mid-sized states are thereforereduced to one set of actors among many.25 9

But Lindahl suggests another layer to societally constitutedgovernance units. He suggests instead, not merely fracture, 260 butporosity. Functional differentiation in the constitution of systemsproduces governance units that are not fortresses with impermeableborders that can be physically felt. Rather, space is understood asdivided two-dimensionally (horizontally and vertically)-the wayfracture and the functional differentiation within a territory isunderstood-and also spatially-self-constituted systems may reach thesame set of actors (objects and subjects of regulation) simultaneously,the way polycentricity is understood. 261 But spatiality is also understoodin changes to the quality of the border and hence the constitutionalcharacter of permeability. 262 The resulting dynamic, triggered by theactivities of these subjects and objects or regulation, produces a dynamicelement to the constitution of systems that itself then reaches back intoeach closed system, producing a constitutional effect through a cycle ofaction and response that touches on the constitutional boundaries of agovernance system. 263

259. Id. at 507.260. Id.261. Id.262. This was nicely suggested in Saskia Sassen, Bordering Capabilities Versus Borders:

Implications for National Borders, 30 MICH. J. INT'L L. 567, 569 (2009) ("The newspecialized borderings that I describe are the borders of our current age: they cut acrosstraditional borders but do not necessarily reduce the incidence of borders, even thoughthey change the character and logics of bordering."). It is also suggested in GuntherTeubner's work on the modalities of contract. Gunther Teubner, In the Blind Spot: TheHybridization of Contracting, 8 THEORETICAL INQUIRIEs L. 51, 55-56 (2007) ("Our firstinterim finding is that social differentiation splits the formerly unitary contract into threeautonomous concatenations of events in the respective legal, economic, and productioncontexts. This difference is-despite (or even because of) mutual observation, structuralcoupling, re-entry, and co-evolution-always reproduced anew as an insurmountablehermeneutic dissonance.").

263. It is in this sense, perhaps that one can understand how, for example, nonstateactors may act as steering subjects in international economic law while being steered. See,e.g., Karsten Nowrot, Transnational Corporations as Steering Subjects in International

860


While Lindah1 suggests the richness of polycentric andintermeshing governance orders, Gunther Teubner has suggested thefecundity of governance forms out of crisis, catastrophe, and societalcollision.264 I have been suggesting the power of normative systems,including those that produce the substantive values of self-constitutingcommunities, as essential to the construction of a complex andnetworked system of poly-governance if human rights impactsindividual or institutional actions. Those normative values, of course,are grounded in ideology, a necessity that I explored elsewhere. 265 ButTeubner would go farther, suggesting in effect, that the addictive effectsof ideology might well shape the nature of the behavior within andbetween systems. He has explored the possibility that systems, likeindividuals, can be organized as inherently addictive or at least prone toaddictive behavior under certain conditions of stress. 266

One could use these hypotheses as the foundation for an explorationof the character of compulsion, but Teubner has something else,something more interesting, in mind. He means to use the insights ofsystemic addiction to posit the way social systems approach catastropheand transform themselves at the moment of disaster, not through theintervention of political actors, but autonomously and within the boundsof its own systemic logic. 267 Not that this cyclical set of dialectical"moments" occur in isolation; rather, systemic addiction-as it reachesto and through the moment of confrontation with its own contradictionand reconstitutes itself to avoid obliteration-engages in these activitiesin constant communication with the economic and legal spheres. 268 Thatinevitable systemic lurching toward catastrophe and its revaluingeffects on the system itself, then, are communicated with and throughthe law and economic systems through which it interacts with businessand the law-state. 269

Economic Law: Two Competing Visions of the Future?, 18 IND. J. GLOBAL LEGAL STUD. 803

(2011).264. See Gunther Teubner, A Constitutional Moment? The Logics of 'Hitting the Bottom',

in THE FINANCIAL CRISIS IN CONSTITUTIONAL PERSPECTIVE: THE DARK SIDE OF

FUNCTIONAL DIFFERENTIATION 3, 3 (Poul F. Kjaer et al. eds., 2011)265. See Backer, supra note 36.266. See Teubner, supra note 267, at 3 ("Is there such a thing as collective addiction?").

See also id. at 3-4 (explaining that self-destructive growth compulsion causedinstitutionalized systems, rationally organized, to act against their own interests).

267. Here, perhaps, is an ironic application of the parable found in Luke 4:23 ('Iarpt,EpdTEUov CEXUT6v . . . . ["Physician, heal thyself. . . ."]), recast as-System, heal thyself.268. This, of course, was the essence of the communication of Apple, Inc. as it moved

from isolated to more intermeshed systemic operation. See discussion, Section II.A., supra.269. Yet, Nietzsche looms in the shadows. He reminds us that such communication can

be inherently subordinating-another contradiction that itself is such to the cyclicity ofdialectical system built on contradiction. In his exploration of the parameters of

861


The addictive behavior of social systems embodies the contradictionbuilt into the system itself. Catastrophe represents that moment whenthe self-organizing constitution of the social system is confronted in anunavoidable way with its destruction through the application of thelogic of its own constitution. 270 Catastrophe, in essence, provides aconstitutional moment when the networked connection of communitiesof self-constituted organs exposes its connection in systems of capillaryconstitutionalism that transcend legal and economic codes and theborders of functionally differentiated governance organizations. 271

Teubner starts with a search for the character ofself-destructiveness in social systems-the root of its internalcontradiction and the lubricant for its revaluation in the face ofcatastrophe. 272 He criticizes the compartmentalized-andbureaucratic-approaches to a "solution" to the financial "based uponfactor analysis, in which individual causes are isolated, through theattribution of causality, and held responsible for the crisis."273 Hesuggests a deeper analysis. Systemic addiction is understood within thecontext of social processes-as a phenomenology of communication. 274

Teubner suggests communicative addiction as a compulsion to growthcommunicated through the mechanics of social interaction grounded inthe dynamics of the production of money.275 This "raises a fundamental

punishment in the original connection of moral concept of guilt (Schuld) in the materialconcept of debt (Schulden), Nietzsche points to a variation of the notions of communicationand hierarchy, as well as the contradiction and reconstitution of ideal and action. Guiltand Debt are built on principles of equivalence and transformation, that is, on thatransposability of action, effect, and commodity. "And whence did ... this idea of anequivalence between injury and pain? I have already divulged it: in the contractualrelationship between creditor and debtor, which is as old as the idea of 'legal subjects' andin turn points back to the fundamental forms of buying, selling, barter, trade, and traffic."FRIEDRICH NIETZSCHE, "Good and Evil," "Good and Bad", in ON THE GENEALOGY OFMORALS AND ECCE HOMO 24, 63 (Walter Kaufmann, ed. & trans., R. J. Hollingdale trans.,Vintage Books 1969) (1887).

270. See Teubner, supra note 219, at 4. This was the essence of the catastrophe facingApple when caught in the contradictions of its own internally ordered system which defiedefforts either to enforce or to explain to intermeshed stakeholder and autonomouslyoperating systems. See discussion, Section II.A., supra.

271. See Teubner, supra note 219, at 4. But this is neither Hegelian dialectics nor Marxistdialectical materialism, though both also reflect the cyclidity of systemic transformationslubricated by the contradictions built into social systems.

272. Id. at 5-10.273. Id. at 5. I have suggested the same in the context of European efforts to assert

regulatory power over irregular securities markets. See Larry CatA Backer, Monitor andManage: MiFID and Power in the Regulation of EU Financial Markets, 27 Y.B. EUR. L.349 (2008).

274. See Teubner, supra note 219, at 6.275. See id. at 8.

862


question for autopoietics: [h]ow are we to conceive of the relationshipbetween social self-reproduction and the compulsion togrowth?"276-what I call the instinct toward managerialism. 277

A dynamic environment of self-reproduction of social systems mustinclude both the equilibrium and destabilizing elements. Systems thatdo not embrace the logic of their own inversion, as compulsion, becomeirrelevant.278 Teubner recognizes that there is "an inherent compulsionto ever higher production in function systems other than theeconomy-an inherent compulsion which, on the one hand, is anecessary condition of self-reproduction, but which, on the other, can bepropelled by assignable growth-inducing mechanisms to the point oftransition into destructive tendencies."279 He notes that law systems arecapable of creating conflict through their own regulation-that is thatthe law itself contains its own contradictions. 280 Politics systems exhibitthe same fundamental contradictory state; the movement toward theattainment of the fundamental objectives of such systems creates theconflicts that also distort the objectives and makes their attainmentmore difficult. To understand the distinction between normalgrowth-growth that does not threaten the stability of systems andtheir networks-from metastasizing growth that threatens stability,

276. Id. at 9.277. Yet, this suggests the possibility of a managerialism that is at variance with the

foundational dynamic of the dialectic that Teubner identifies. That managerialism isconsidered in the consideration of self-destructive growth versus growth dynamics incommunication. Id. at 7-10. Addictive behavior has a negative connotation, like the

addictive imperatives of globalized capital considered earlier. These behaviors are

destabilizing to individual and to system. They are also inherent in the body of the

individual or system. The nature of addiction, after all, is its compulsiveness.The definition of individual addiction-compulsive engagement in anactivity despite lasting negative consequences-must be re-thought forsocial systems in general, and for collective actors in particular. Which'addiction mechanisms' are responsible for the fact that the autopoieticself-reproduction of a social system through the recursivity ofsystem-specific operations reverts into a communicative compulsion torepetition and growth, bringing self-destructive consequences in itswake?

Id. at 8. Yet this addiction, if Teubner is right, is also natural to the individual andsystem-without it, as Nietzsche reminds us, the dynamic element dissipates-no growth,no progress, no catastrophe bringing revaluation and transformation of the innerconstitutions of systems.

278. This was certainly a lesson applied by Apple as it opened its governance frameworkto outside intermeshing and by that opening preserved its own integrity. See discussion,Section II.B., supra.

279. Teubner, supra note 219, at 10.280. Id. at 11.

863


Teubner turns to catastrophe-destabilization powerful enough tothreaten systems. 281

For that purpose, the analogy to cancer provides a powerfulmetaphor, and he invokes the idea of constitutional moments. 282

Teubner suggests a hybrid constitutionalization, in which a balance isreached between internal processes and external interventions in theprocess of reconstitution in the face of catastrophe. That is, a wall ofexternal communication may be necessary to produce the boundarieswithin which self-reflectivity may serve to reconstitute systems in themidst of dynamic revaluation. 283 Teubner suggests "not only stateinstruments of power, but also legal rules, and 'civil society'countervailing powers from other contexts, media, public discussion,spontaneous protest, intellectuals, social movements, NGOs or tradeunion power . . . should apply such massive pressure on the functionsystems that internal self-limitations are configured and become trulyeffective."284 Thus, the task is to enlist the web of systems in theircommunicative interactions to foster interactions that provide a spacewithin which any particular subsystem can construct its own stabilizingset of limits. The object is managerial and can be significant."Political-legal regulation and external social influence are only likely tosucceed if they are transformed into a self-domestication of the systemicgrowth dynamic. This requires massive external interventions frompolitics, law, and civil society: specifically, interventions of the typesuited to translation into self-steering."285

The difficulty, though, when dealing with social systems-forexample the global economy-is that the character of the normativestructure is complex. With a nod to both Derrida 286 and Foucault, 287

Teubner focuses on the capillary constitution-the microstructures ofrules that constitute behavior values. This capillary constitution may

281. Id.282. Id. at 10-21.283. Id. This was nicely evidenced, of course, by the permeable barriers between Apple,

Foxconn, and the outside certification organizations. See discussion, supra, Section II.284. Id. at 13.285. Id. at 15. Yet, as the Apple episode suggests, it can as well, in three-dimensional

governance space also consist of massive interventions from other societally constitutedorganizations operating in nonstate governance space. See discussion, Section II.B., supra.

286. See generally JACQUES DERRIDA, THE OTHER HEADING: REFLECTIONS ON TODAY'SEUROPE (Pascale-Anne Brault & Michael B. Naas trans., 1992) (1991) (describing how theEuropean identity is changing through immigration and how that identity will have toadapt).

287. Michel Foucault, Rdderwerke des Uberwachens und Strafens: Ei Gesprach mitJ.-J. Brochier [The Wheels of Monitoring and Penalties: A Discussion with J.-J. Brochier],in MIKROPHYSIK DER MACHT [THE MICROPHYSICS OF POWER] 31, 45 (Michel Foucault ed.,1976).

864


not be managed directly-the tools of intervention are too crude for thatpurpose, but intervention may serve the same purpose as a grain ofsand in an oyster-as an irritant that energizes the self-constitutingmechanics of the subsystem in accordance with its own logic. 288

But this raises issues of method. For Teubner, this is the case of theBeelzebub casting out the devil.289 The pattern of politicalconstitutionalism might provide a loose template for managing societalcapillary constitutionalism-that is for stabilizing systems grounded inthe constitution of micro power. And what better notion thanRechtsstaat notion for that purpose-process as the bones of systemconstitution!

Just as in political constitutions power is used to limitpower, so the system-specific medium must turn againstitself. Fight fire by fire; fight power by power; fight lawby law; fight money by money. Such a medialself-limitation would be the real criterion differentiatingthe transformation of the 'inner constitution' of theeconomy from external political regulation. 290

This social system stability is not sourced within the state, but inthree "'reflection centers' within society, and in particular, withineconomic institutions, into the criterion of a democratic society.Candidates for a capillary constitutionalisation exist not only in theorganised sector of the global economy, in corporations and banks, butalso in its spontaneous spheres." 291 These collegial institutions"cultivate the relevant logic of actions, and [have required] them to beconstitutionally institutionalised."292 Here, one melds the utility of the

288. "The desired course for social sub-constitutions is, as has been said, in the limitations ofthe endogenous tendencies towards self-destruction and environmental damage. This is thecore of the constitutional probldmatique, this difficult handling of the focal sub-system'sself-transformation and that of their environmental systems." Teubner, supra note 219, at 15.

289. Id. at 16.290. Id. at 17.291. Id. (citations omitted).292. Id. at 24 (citations omitted). This notion of collegial institutions as collective

stakeholders in societal constitutionalism, even in the economic sphere, has foundexpression within the governance efforts of public institutions in the wake of the 2007financial crisis. The Financial Stability Board system represents a public sector version ofthis naturalization of institutionalized communication within the economic sphere. SeeLarry CatA Backer, Private Actors and Public Governance Beyond the State: TheMultinational Corporation, the Financial Stability Board, and the Global GovernanceOrder, 18 IND. J. GLOBAL LEGAL STUD. 751, 784-91 (2011).

865


topology of Hans Lindahl's "ought places" with Teubner's process ofengagement for crisis and change.

Key for Teubner are "[t]he politicisation of consumers," "[t]heecologisation of corporate governance," and "[p]lain money." 293 The firstconcept evolves subsystem process to the construction and exercise ofsocial preferences; the second concept broadens the impact of corporateconstituencies within the governance structures and decision-making ofeconomic entities; the third concept would add stability and order to theglobal financial constitution. 294 The latter would require the reassertionof national power over the power to create money and moneyequivalents-the medium of economic exchange in its most liquid form.

Legal norms serve as both bridge and glue, joining autonomoussystems.

A constitution is always the connection of two realongoing processes. From the point of view of law, it isthe production of legal norms, which is typically mergedwith the basic structures of the social systems. From thepoint of view of the social system, it is the generation ofbasic structures of the social order, whichsimultaneously inform the law and are regulated byit.295

But law serves a more important purpose: it becomes the source forclosure, for the provision of a mechanics of stability. The stabilityprovided by law is one that a social system, for example, the globaleconomic system, may be incapable of providing under the logic of itsown normative ordering. Law in this sense is both an orderingmechanism and an intervention to avoid the catastrophe of theself-destructive addictive tendencies of any system. 296

293. Teubner, supra note 219, at 17-19.294. See id. Indeed, consumer and investor activism, expressed in buying and

investment decisions, were central to Apple's actions, to the relationship between Appleand FLA, and ultimately between Foxconn and its employees. The irony is that labor, adirect stakeholder, could exercise a political role and precipitate a governance crisis withinthe Apple-Foxconn-China space only by their suicides. The more remote stakeholdertended to have greater political effect. See discussion, Section II, supra. Cf. Larry CatABacker, From Moral Obligation to International Law: Disclosure Systems, Markets and theRegulation of Multinational Corporations, 39 GEO. J. INTERNAVL L. 591-653 (2008).

295. Id. at 28.296. See id. at 29. And yet, as Section II suggested, in three-dimensional space, law's

role may be played not by governance substitutes, but by monitoring and certification. Cf.Larry CatA Backer, Global Panopticism: States, Corporations and the Governance Effectsof Monitoring Regimes, 15 IND. J. GLOBAL LEGAL STUD. 101-48 (2008).

866


That is the key to societal constitutionalism's addiction problem.Law as methadone-i[tihe economy ... requires massive interventionsfrom law in order to achieve self-constitutionalisation; albeit not to thecomprehensive extent characteristic of politics." 297 There is a formalistcast to this constitution of societal systems undergirded by law. And notjust governance, but connected by a more formal rule structure typicalof the Rechtsstaat. "Through the restriction of money-creatingcompetences, law apprehends the limitative function of an economicconstitution and, at the same time, stabilises the self-reflexive relationsof the payment operations, which, without being legally anchored in thisway, would again disperse."298 I wonder, though, whether law, asTeubner understands it, is broad enough to include those techniques ofbehavior controlling power that serve Foucault's notions ofgovernmentality. 299

297. Teubner, supra note 219, at 29.298. Id. at 31.299. See Michel Foucault, Governmentality, in THE FOUCAULT EFFECT: STUDIES IN

GOVERNMENTALITY 87, 102-03 (Graham Burchell, Colin Gordon & Peter Miller eds., 1991)(describing governmentality as "[tlhe ensemble formed by the institutions, procedures,analyses and reflections . . . [t]he tendency which, over a long period and throughout theWest, has steadily led towards the pre-eminence over all other forms . . . of this type ofpower . . . [and] [t]he process, or rather the result of the process, through which the stateof justice of the Middle Ages . . . gradually becomes 'governmentalized."'). For a valuableanalysis, see Wendy Larner & William Walters, Global Governmentality: GoverningInternational Spaces, in GLOBAL GOVERNMENTALITY: GOVERNING INTERNATIONAL SPACES

1, 16 (Wendy Larner & William Walters eds., 2004) ("What we have called globalgovernmentality entails a move of 'bracketing' the world of underlying forces and causes,and instead examining the different ways in which the real has been inscribed inthought."); Michael Reed, From the 'Cage' to the 'Gaze? The Dynamics of OrganizationalControl in Late Modernity, in REGULATION AND ORGANIZATIONS: INTERNATIONALPERSPECTIVES 17, 43 (Glenn Morgan & Lars Engwall eds., 1999) ("[Blureaucratic controlis giving way to a qualitatively different regime of control based on a contrastingtrajectory and logic of regulative ordering in which intensive, but remote and dispersed,scanning of organizational behaviour and its 'normalizing' effects are the key features.").

Consider the complex of power issues involved in the construction oftransnational transparency regimes of financial markets. Entities likethe International Monetary Fund and World Bank "have foundthemselves drawn into battles with a range of transnational,multinational, domestic, and international authorities over theproduction of financial information and the diffusion of financialinformation." In this aspect, surveillance is felt as gouvernmentalit, alinking of governance with the techniques of its power.

Larry Cata Backer, Global Panopticism: States, Corporations, and the Governance Effectsof Monitoring Regimes, 15 IND. J. GLOBAL LEGAL STUD. 101, 136-37 (2008) (citationsomitted) (quoting Margaret Hanson, The Global Promotion of Transparency in EmergingMarkets, 9 GLOBAL GOVERNANCE 63, 64 (2003) ("These political battles cast a critical lighton seemingly apolitical assumptions that motivate much of the theoretical rationale forinternational governance strategies inspired by the goal of a transparent global financialsystem.")).

867


But the notion of governmentality might require avoidance foranother reason-it detracts from the larger project of securingrecognition of the possibility of constitutionalism beyond the state.Teubner recognizes the skepticism within the academic herd,300 but heseeks to assuage them through mimicry, and thus the transposition oflaw and social system as basis of autonomous constitution (andemergence of autonomous constitutional code).30' In any case, it is notclear to me that the dynamics of the law-state ought to transpose to thesocial state. Here, Teubner's own resort to Foucault, and especially tonotions of governmentality, might provide a useful insight. Theconstruction of a constitutional code, understood in a systems way,might be understood as grounded in structural coupling of social systemand governance code, built into the multiple fabrics of behaviormanaging systems, not law understood in its traditional form using themetrics of traditional constitutionalism. Understood in that way, theconstitution of a global economy, founded on the communication amonglaw- governance-politics systems and the establishment of governancerule hierarchy (constitutional code above the governance code fromwhich it is derived and through which its elaboration is limited),becomes clearer and more powerful.

The communicative (structural coupling) aspect then comes to theforeground, tying into Teubner's notion of communication betweensystems as an irritant (and thus as a spur to internal change) and as anexternal limit on internal operation.302

These two types of programmes irritate one another tothe point where they cause a specific co-evolutionarypath of legal and economic structures within theeconomic constitution. . . . Fundamental principles of theeconomic system are re-constructed as legalconstitutional principles (according to the particularhistorical situation: property, contract, competition,social market economy or ecological sustainability)....In the opposite direction, something comparable occurs:the meta-code allows the re-entry of law into theeconomic system (again, historically variable: mandatoryrules of contract law, the social obligations of property,the limits of competition, rule of law principles ineconomic decisions or fundamental rights within

300. I use the term here in its Nietzschean sense, though note an irony in applyingTeubner's notion of self destructive compulsion to the herd habit.

301. Teubner, supra note 219, at 31-32.302. Id. at 32-33.

868


corporations). Thereby, constitutional law bindseconomic operations. 303

We now understand the role of law sub-systems within the processof constitutional management as part of Teubner's construct, but whatabout political subsystems; what about the role of the state? "In thefunctionally-differentiated society, the political constitution cannotfulfill the role of defining the fundamental principles of othersubsystems without causing a problematic de-differentiation-asoccurred in practice in the totalitarian regimes of the twentiethcentury."304 In place of hierarchy, Teubner offers communication as anaction-inducing irritant and as autonomy. "We must give up the notionthat, in the state, politics represents society and other socialspheres-people or sub-spheres-participate therein. No socialsub-system, not even politics, can represent the whole society."305

But the economic system cannot play its role properly unless it tooacquires it own autonomous politics. Here again is mimicry. A socialsystem, like a law or political system requires its demos. And theactions of that demos constitutes legitimating acts and the preservationof autonomy within a system that preserves accountability.306 Again,structural mechanics are meant to manage the contradictions ofsystems that are inherently self destructive, as system, by providingwebs and networks of restraint.307 But like political systems, thatmanagement of contradiction requires an outside force-systemiccoupling and intermeshing produces the therapeutic results like that of

303. Id. at 33-34 (citations omitted).304. Id. at 36 (citations omitted).305. Id. at 37.306. This is the essence of the political concept of popular sovereignty in Western public

law constitutionalism and political theory. See, e.g., EDMUND S. MORGAN, INVENTING THEPEOPLE: THE RISE OF POPULAR SOVEREIGNTY IN ENGLAND AND AMERICA (1988). It alsounderlies the fundamental principle of the "mass line" in Marxist Leninist states likeChina. See Larry Cati Backer & Keren Wang, State and Party in the ScientificDevelopment of a Legitimate Rule of Law Constitutional System in China: The Example ofLaojiao and Shuanggui (June 1, 2013), Conference: Rule of Law with ChineseCharacteristics, Vol. 2013, at 101, Penn State Law Research Paper No. 26-2013, availableat http://ssrn.comlabstract=2273044. That it can be transposed to societally constitutedsystems, like enterprises, merely reflects the parallels the similarity in constitution andorganization, a central premise of this article.

307. See id. at 40-41. Of course, this was the essence of the position that Apple founditself in 2012, one that both produced the crisis (fear of a loss of legitimacy in the eyes ofconsumers, investors, and states) and its solution (by embedding their system within andamong those of certifier organizations) which then strengthened the autonomy andcoherence of Apple's societally-constituted organization as reflected in and through itsstructurally coupled governance universe. See discussion Section II.B, supra.

869


the psychologist with the power to restrain and a set of therapeuticdevices that the patient may use to self correct the contradictions of self-destructive compulsion. 308 For the financial system, that role would beserved by an instrument of the law-state-the central banks."'Guardians of the constitution'-this is the appropriate metaphor. Andjust as constitutional assemblies and constitutional courts are theguardians of the political constitution, so the central banks and theconstitutional courts are the guardians of the economic constitution.And their constitutional politics requires a high degree of autonomy."30 9

However, effectiveness is possible only to the extent that these centralbanks attain a degree of autonomy from any one sector of thelaw-politics-economics troika.

Here, the meaning of an autonomous financialconstitution is revealed, which must control its own logicand cannot, despite its highly political character, bedelivered by institutionalised politics. The analogy withconstitutional courts is, again, appropriate. This is aprinciple not of the political, but of the societalseparation of powers. 310

Thus, Teubner draws this complex web together. All systems aresubject to catastrophe as a function of the inherent contradictions of itsown internal logic. Those contradictions are manifested (using thelanguage of the therapeutic) in compulsive and self-destructive behaviorwhich, given the internal logic of any system, can lead tocatastrophe-the imperiling of system order itself.311 Theself-destructive contradictions of all sub-systems (but, in this case, theeconomic social system) derived from the compulsions of its owninternal logic can be managed. That management is inherent in theoperation of the complex web of the troika law-politics-economicssubsystems within which collective organs operate. 312 Yet, no networkedsystem can successfully project its power completely or thoroughly toreconstitute another. It may provide boundaries against the externaleffects of internal compulsion, and it may, acting within the constraints

308. This is the essence of the third party certification process-one of adoption ofstandards, internalization within an autonomous constituted system, and monitoring andassessment within the constraints of the standards developed to prop up systemiccoherence. See discussion supra, Section II.B.

309. Teubner, supra note 219, at 40-41.310. Id. at 41 (emphasis removed).311. Id.312. Id.

870


of its own logic, irritate internal reaction in other systems. 313 But theseirritants can be consciously applied and targeted. And thus, a simpleirritant-the severe limitation on the power over money-is suggestedas a means of working the machinery of networked sub-systemscommunicating with (irritating) each other and thus forcing internalconfrontations with the illogic of internal constitutions beforecatastrophe manifests to threaten all sub-systems within the greaterglobal social organ. 314

Teubner has elaborated the possibility of order in the systemscosmos. He identifies the levers through which the system itself can faceits self-destructive contradictions and compulsive addictions, while stillavoiding excess and, at the same time, producing conditions that permitfoundational revaluation in the face of the possibility of catastrophe. 315 Iwonder, though, whether fundamental systems order necessarilyincludes a large dose of chaos. It is not clear to me that the fundamentalcontradictions of systems-their relentless drive toward the limits oftheir logic; their compulsion to drive toward their limit, and, by suchcompulsion, to destroy their essence as they strive to attain it-is notboth basic and inescapable. 316

It is not the nearness of catastrophe, but catastrophe itself thatprovides the space within which a system either reengages inself-revaluation or is overtaken and reconstituted from outside. That isa possible lesson from the Great Depression of 1929. Teubner drawsnear that precipice and pulls back. But in that turn, he has illuminated

313. Id.314. See id.315. Gunther Teubner, A Constitutional Moment? The Logics of 'Hitting the Bottom,' in

THE FINANCIAL CRISIS IN CONSTITUTIONAL PERSPECTIVE: THE DARK SIDE OF FUNCTIONALDIFFERENTIATION 3, 15-16 (Poul Kjaer, Gunther Teubner & Alberto Febbrajo eds., 2011).

316. I wonder whether catastrophe is avoidable in the face of the inherentcontradictions of systems, and the fundamental drive of systems to follow their internallogic (purity) to its limit (compulsion, addiction, crisis).

People, groups, all conscious organisms simultaneously seek theprotection of oblivion, an acceptance of repose in some perfect andeternal state, equilibrium, on the one hand, and also struggle toovercome the desire for oblivion, that is struggle against faith. Suchstruggle leads to emancipation for those who can successfully struggle.That success is valid for those who struggle, but cannot be gifted toothers. Each in turn must struggle-individual, group,organism-against the reality bequeathed to it. And thus the processof self-overcoming and recurrence are linked through death andtransformation.

Larry Catd Backer, Cycles of Legal Foundations: Law After Deconstruction, LAW AT THEEND OF THE DAY (Aug. 14, 2006, 1:44 PM), http://cbackerblog.blogspot.com/2006/08/cycles-of-legal-foundations-law-after.html. This suggests an ancient insight into the cyclicityinherent in systems. See generally IBN KHALD.N, THE MUQADDIMAH: AN INTRODUCTIONTo HISTORY (Franz Rosenthal trans., Princeton Univ. Press 2d ed. 1967) (1377).

871


an elegant and plausible basis for management, far more coherentlydrawn than the limited scope approaches that have been the bread andbutter of financial sector analysis since the recognition of the slidetoward financial sector catastrophe in 2007. It is in this sense that InoAugsberg's insight about the role of interpretation of systemic text-as aform of structural coupling-can be usefully understood:

Law's function is then no longer primarily to guaranteeunity, but rather to guarantee difference. Luhmann'stheory of fundamental rights can serve as an example ofthis kind of legal theory. Under circumstances in whichsociety has 'dynamized its restabilization process, sothat change has become a constant,' the specifically legalactivity, understood as a social immune system, has toreprogram its immune reactions so that they focus moreon protecting diversity and variation.317

It is also in this context that Marc Amstutz's 31s insights about theway in which legal systems adapt to their social environments can, inturn, be adapted to the governance system of nonstate actors. 19

"Self-organizing values deriving from legal policy, on the one hand,social responsiveness through the plasticity of the normative elementswoven into a legal system, on the other-these, in a nutshell, are theconditions for evolvable, time-binding law."320 This produces both amove toward constitutionalization as a self-referencing structure(preserving stability)3 21 and a privileging of norm certainty in text.322

These insights must be adapted precisely because they remain two-dimensional. That two dimensionality is grounded in the embrace of thelaw-state system and the hierarchy of law as the prism through which

317. Augsberg, supra note 75, at 386-87 (citations omitted).318. Marc Amstutz, Biography, HIIL, LAw OF THE FUTURE FORUM, http://www.lawofthe

future.org/167/ (last visited Aug. 17, 2013) ("Marc Amstutz is Professor of CommercialLaw, Legal Theory and Sociology of Law at the University of Freiburg. He is a member ofthe executive board of the German Association for Law & Society (Vereinigung fdr Rechtund Gesellschaf) and co-founder of the Institut fir Recht und Wirtschaft (IDE) at theUniversity of Freiburg where he is executive director.")

319. Marc Amstutz, Global (Non-)Law: The Perspective of Evolutionary Jurisprudence, 9GERMAN L.J. 465 (2008).

320. Id. at 474 (2008) (citation omitted).321. "These rules on rules must not only be capable of reacting to unforeseen cases, that

is, to provide guidance as to how new law is to be created; the rules on rules must alsoassure the finitude of the adjudication process." Id. at 475 (citation omitted).

322. "Only textuality can ensure that a rule is responsive for social evolution." Id.(citation omitted).

872


systemic relationships are understood. 323 With a focus on therelationship of the autonomy of law and society, the nature of regulatoryrelationships posit a singular layer-that between society as a singularamalgam and law, bounded up in states.324 That is a useful frameworkfor understanding the relationship between these organisms aroundwhich political society was organized through the end of the 20th centurythrough structural coupling grounded in the semiotics of communicationamong a single set of core actors and a single set of signs. 325 But it doeslittle to suggest the ways in which this relationship is itself embedded,and increasingly so within a world structured on the free movementprinciples of globalization, among governance systems and the multiplesocial organisms through which they are expressed, including the stateand society, but also international public organizations, civil society,religion, and economic enterprises. It also does little to indicate theways in which the technologies of regulation have themselves changedthe architecture of regulatory systems. 326

What emerges from the application of these insights drawn fromtheory to the reality suggested by Apple, Inc., is the antithesis oforderliness, unity, and linearity of conventional constitutionalism.Societal constitutionalism is marked by four fundamentalcharacteristics that also define the constitutional element of thestructure of global law of which societal constitutionalism forms apart. 327 These four-fracture, fluidity, permeability, andpolycentricity328-both structure the dynamic governance space to whicheven states are now bound, and also forms the essence of the premises

323. See, e.g., Marc Amstutz, The Letter of the Law, 10 GERMAN L.J. 357 (2009).324. "One spectacular example of text fluctuations is the 6criture of the BGB, which was

applicable law in an empire, throughout the Weimarer parliamentarianism, in the fascistregime of the Third Reich, in the Bonn Republic, and finally also in reunited Germany."Id. at 373.

325. Id. ("the boundaries of the semantic identity of signs are functions of an opensystem of permanent re-differentiation . . . which makes it possible to change meaningswhen signs are repeated, and . . . the possibility for society to give Law constant measureand to determine the modulating legal language game.")

326. See Vaios Karavas, The Force of Code: Law's Transformation UnderInformation-Technological Conditions, 10 GERMAN L.J. 463, 478-80 (2009). The discussionof calculable normativity first considered in Vaios Karavas & Gunther Teubner,http://www.Company NameSucks.com: The Horizontal Effect of Constitutional RightsAgainst "Private Parties" within Autonomous Internet Law, 4 GERMAN L.J. 1335, 1347(2003) suggests both the transformation and limited context within which traditionalstructural coupling tethered to the law-state system is understood and studied.

327. Backer, supra note 44 (arguing that four characteristics create "the fundamentalstructure of global law . .. [and] serve as the structural foundations of its constitutionalelement, its substantive element, and its process element").

328. Id.

873


that guide the self-constituting behaviors of nonstate actors like Apple,Inc. Fracture is certainly well understood within now classic societalconstitutionalism.329 Fracture suggests a reordering rather than an endof order and the emergence of multiple, uneven, and functionallydistinct governance communities that slide over, through, and within aset of unchanging objects and subjects of governance-consumers,investors, citizens, and "those norms that structure and organizefracture in a world order populated by an aggregate of a large variety ofgovernance organs with territorial boundaries that vary with thevariation in the character of the governance organization."330 Apple, Inc.is operated in a governance space marked by fracture-between thelaws of home and host states, between international law and norms,among its own operating governance rules and those of its downstreamsupplier, and near the rules of third party private accrediting units fromwhich it buys legitimacy among public and private constituencies. 331

Beyond fracture there is fluidity, "based on the assumption thatgovernance organizations are impermanent and that there is no need toorganize a meta-system around the premise that once established,self-constituted organizations ought to be preserved."332 Fluiditysuggests the opposite of governance equilibrium and stability. It positsthat governance systems move with the borders and tastes of theconstituting agents.333 It suggests temporality as a significant factor inself-reflexivity. Governance units do not exist outside of history, nor dothey exist outside the logic of the ideology of mass movements that nowserve to frame governance. Fluidity suggests the permanence of thenorms within which governance is effectuated but not the functionallydifferentiated organs the objective of which is to increase the welfare oftheir participants within those norms. 334 Fluidity was central to Apple'sgovernance environment-with a changing architecture of governancegrounded in a more stable system of norms tied to the desires of criticalstakeholders, consumers, and investors, and subject to the incompleteinterventions of states.

Fluidity suggests the porosity that is a characteristic of systemsoperating in a fractured governance space. This is the realm of

329. See, e.g., Fischer-Lescano & Teubner, supra note 16, at 1017-44 (identifying "[t]hreeguiding principles for the decentralized networking of legal regimes").

330. Backer, supra note 44, at 187.331. See discussion at Section II, supra.332. Backer, supra note 44, at 188.333. Id.334. This suggests the medieval distinctions between gubernaculum and jurisdictio, the

administration of the apparatus of government and the overarching normative frameworkwithin which those operate. Cf. Larry CatA Backer, Reifying Law-Government, Law andthe Rule of Law in Governance Systems, 26 PENN ST. INT'L L. REv. 521, 522 (2008).

874


structural coupling, but not of communication in its two-dimensionalcontext-permeability suggests a porosity of systems in paradox. 335 Themore open the system is to inter-systemic penetration, the more stableand structurally sound the system. Societal constitutionalismreconceives borders as divisions that separate but do not impede. Apple,Inc. was at the center of a set of systems that projected themselves inand through each other, and yet, by that projection, each systempreserved and solidified its integrity even as it opened itself to reactionfrom the penetration. Apple's relationship with national law (UnitedStates and China), international norms, the norms of the Fair LaborAssociation, all contributed to or affected the regulatory relationshipsbetween Apple and its suppliers and became critical in the constructionand maintenance of Apple's autonomous governance structures forsupplier behavior. Apple maintained the structural autonomy of its ownsupplier governance even as that governance was substantially affectedby interventions from other governance units. The techniques ofstructural coupling-and its dynamics-are at the center of Teubner'snotions of irritants and cyclicity, but the intervention cycles now operatein a deeper space: "governance not only serves as a signifier of a spacethat exists outside of the state-government master construct, but also inintimate connection with it."336

Fluidity and porosity in fractured space do not operateseriatim-they function simultaneously throughout governance space;that space is polycentric space. "If law is no longer the only authenticand legitimate means of effectuating governance systems, and if statesare no longer necessarily the principal and superior organization for themanagement of behavior, it may also follow that governance can exist inmultiple locations simultaneously."33 7 Polycentricity sets societalconstitutionalism in motion-constant motion. To some extent, itsuggests the focus on collaborative governance among multiplegovernance stakeholders that is the hallmark of the "New Governance"advocates.338 But it also suggests collision as much as collaboration and

335. See Backer, supra note 44.336. See Backer, supra note 36, at 106 (citing James N. Rosenau, Governance, Order, and

Change in World Politics, in GOVERNANCE WITHOUT GOVERNMENT, supra note 122, at 1). Seegenerally COMPLEx SOVEREIGNTY: RECONSTITUTING PoLITIcAL AUTHORITY IN THETWENTY-FIRST CENTURY (Edgar Grande & Louis W. Pauly eds., 2005); PROSPECTS OF LEGALSEMIOTIcs (Anne Wagner & Jan M. Broekman eds., 2010).

337. Backer, supra note 44, at 196.338. E.g., Julia Black, Decentring Regulation: Understanding the Role of Regulation and

Self-Regulation in a 'Post-Regulatory' World, in 54 CURRENT LEGAL PROBLEMS 103, 108(M. D. A. Freeman ed., 2002) ("Regulation therefore cannot take the behaviour of thosebeing regulated as a constant. Regulation is . . . the 'conduct of conduct', or. . . 'to act uponaction."') (citations omitted); Jody Freeman, The Private Role in Public Governance, 75

875


irritation as much as harmonization. 339 Apple, Inc. provides a case inpoint-it is operating within and against multiple governance systemswith shifting authority and contributing to the polycentric irritation forits own downstream supplier Foxconn, which also faces similarirritations to its own societally constituted system, but one in arelationship that that of Apple which is vertically arranged.

Together, this suggests a dynamic element to societalconstitutionalism that may help to explain-by the focus on constitutedsocieties within complexes of such entities-both the nature ofconstitutive autonomy and the character of communication that, whileinternalized, does not necessarily suggest a threat to or insufficiency ofseparation from other governance bodies. This indicates intermeshingbeyond networking, irritation, and permeability. 340 It suggests insteadthe simultaneous operation of multiple interpenetrations of systemsthat remain stable only within a fluid context of constantcommunication framed by the desires of overlapping stakeholders thatfind expression through action (voting, consuming, investing, assessing,reporting, etc.). This produces a regulatory polycentricity that is itselfdynamic among interacting and dynamically constituted societalorganizations, all of which then intermesh with public bodies, includingthe state. These are the lessons that were illustrated by Apple, Inc. inSection II, as it sought to protect its self constitution in the face of crisisin a shared governance space. These lessons, in turn, may well provide abasis in theory for understanding phenomena, like that of thegovernance structures of Apple, Inc., that gets us closer to conformingour theory-ideology to the realities around us. The dynamic element ofsocietal constitutionalism, especially for nonstate governanceorganizations, solves the difficulty of a static view of societalconstitutionalism-the logic of autonomy within self-constitutingsocieties that do not have either territory or broad function that operatein a space in which states continue to assert a broad authority, but inwhich other actors also intervene beyond and among states.

N.Y.U. L. REV. 543, 550-56 (2000) (negotiated rulemaking); Elinor Ostrom, BeyondMarkets and States: Polycentric Governance of Complex Economic Systems, 100 AM. EcON.REV. 641, 641 (2010) ("Scholars are slowly shifting from positing simple systems to usingmore complex frameworks, theories, and models to understand the diversity of puzzlesand problems facing humans interacting in contemporary societies.").

339. See Larry CatA Backer, On the Evolution of the United Nations'"Protect-Respect-Remedy" Project: The State, the Corporation and Human Rights in aGlobal Governance Context, 9 SANTA CLARA J. INT'L L. 37, 73-77 (2010) (discussing "[tihecorporate responsibility to respect human rights").

340. Cf. Teubner, supra note 118, at 212-13 (discussing the factors necessary for thesuccess of corporate codes).

876


CONCLUSION

"In 1973 Niklas Luhmann could still assert that a radical change inthe state of the constitution and the institutional and operationalunderstanding of constitutional arrangements comparable to theestablishment of the constitutional state in the 18th century has neveroccurred again."341 This radical change has since occurred.Constitutionalism has become something more than a means to deepenthe logic of the state system upon which much of constitutionaldevelopment was based. Having served as a template for the"perfectable" state, it has become the framework for judging thelegitimacy and value of all constituting societies. The varioussettlements of the aftermath of the second World War were meant toinstitute an international system that would protect the state system,now tamed by an appropriate foundation of substantive values. But thesystem that it created-public and international on the one hand, andprivate and globalized, on the other-gave rise to fracture of governanceeven as it provided a basis for the protection of the state system. Ineffect, globalization and the internationalization of law extended thespace for governance. States continue to exist as they did, butgovernance now has become institutionalized beyond the frontiers of thetraditional jurisdictions of states. "The history of modernity has beenthat of increasing complexity in the patterns of social and economicorganization, defiant of singular or all-embracing solutions. . . . Yet, inmuch of our thinking,. we continue to believe that society can somehowbe governed or steered."342

This article considered the consequences of this emergingframework of hierarchical power arrangements and horizontal effectsfor constitutional theory among this amalgam of states and othersocietally constituted organisms in three-dimensional space. Section Iengaged in framework setting, focusing on the structures of societalconstitutionalism within the logic of globalization. This considerationnecessarily frames societies and their constitution from a spatiallystatic and inward-looking perspective. That investigation firstconsidered societal constitutionalism as a set of parameters for theordering system of states and nonstate actors and then the organizationof corporate actors within this framework in the context of the humanrights impacts of corporations. Section II considered these constitutedsocieties in a more dynamic and outward-looking perspective. The

341. Grimm, supra note 30, at 71.342. Ash Amin & Jerzy Hausner, Interactive Governance and Social Complexity, in

BEYOND MARKET AND HIERARCHY: INTERACTIVE GOVERNANCE AND SOCIAL COMPLEXITY 1,1 (Ash Amin & Jerzy Hausner eds., 1997).

877


episode of Apple, Foxconn and the worker suicides suggest not merelytwo dimensional space-the structural coupling and intermeshingamong self-referential societally-constituted entities and states, butrather a three-dimensional space in which hierarchies might exist in alldirections among clusters of states, nonstate self-constituted actors andother organisms that produce and monitor governance. If societies canbe understood as subject to certain principles for their inwardconstitution, to what extent might there be principles that affect theoutward expression of inward self-constitution, especially when thatdirection is not merely "up" and "down" a two dimensional hierarchy?That consideration requires both an examination of the way in whichsocietally constituted entities may be felt and seen by outsiders, but alsothe way that expressive communication can have inward affectingconsequences. For that purpose, Gunther Teubner's notions of addictionand chaos and Hans Lindahl's notions of spatiality and communicationserve as a starting point.

Section III had as it subjects the consideration of the theoreticalconsequences of the realities explored earlier. What in Section Iappeared as little more than the expansion of the family ofself-constituted actors becomes, in Section II, a polycentric mass thatnot just communicates but collides, conflicts, and affects the externalextent of governance spaces and the internal organization of thosespaces. The context is the enforcement of international human rightsnorms through the governance activities of Apple Inc. and its supplychain. The focus is the spaces where systems converge, harmonize, andcollide. But Section III suggested theoretical order to the chaos, and astructure that extends and generalizes the particular factual context ofApple's crisis and its resolution.

Section III suggested the need to expand our understanding ofconstitutional theory beyond incarnation and judgment, to includecommunication among systems in a complex polycentric constitutinguniverse in which territory remains an essential feature of systemicdifferentiation, but the character of territory becomes substantiallymore mutable. The conclusion is one that fundamentally shifts the focusof Ralf Michael's brilliant analysis of lex mercatoria ("the lex mercatoriawithout a state remains within a state-focused legal paradigm")343-thesocietal constitution beyond the state remains engaged by and with thestate and is not absorbed within a state-focused legal paradigm. Thearticle thus concludes where it started-in constitutional theory. Nowliberated from the state, and its theoretical constraints, and of thepublic-private binary that also privileges the state (and law) as the

343. Michaels, supra note 116, at 452.

878


center of constitutional analysis, societal constitutionalism is put inmotion that oscillates rather than moving back and forth between publicand private spheres.

In his 1920 Hibbert lectures on "The State, Visible and Invisible,"344

the English author, Anglican prelate, and professor of Divinity atCambridge, William Ralph Inge, criticized the deification of the statequa state. But in a moment of prescient clarity logic took him further:

We are perhaps on the threshold of an epoch in whichother associations, either wider than the nation, like theCatholic Church, or Labor, or narrower than the nation,like the groups which it is proposed to form into tradeguilds, may claim and receive the same immoral andunquestioning devotion which, when given to the State,has brought such hideous calamities upon the world. Ifso, we shall find that the error is not less destructive inits new forms.345

We have arrived at such an age. Whether, indeed, the multi-spatialand polycentric governance frameworks of a world structured onprinciples of societal constitutionalism will live down to Dean Inge'svision remains to be seen, but what is clear is that the transformationfrom the monotheism of state worship to the more complex paganism ofthe modern age of government without the state will surely reshape therelationships between individuals and governance organs.

344. William Ralph Inge, The God-State, in LEVIATHAN IN CRISIS: AN INTERNATIONALSYMPOSIUM ON THE STATE, ITS PAST, PRESENT, AND FUTURE, BY FIFTY-FOUR TWENTIETHCENTURY WRITERS 150, 150 (Waldo R. Browne ed., 1946).

345. Id. at 153.

879